Ireland’s new wealth is sitting still – but for how much longer?
- Jun 2
- 1 min read
With more than €170bn on deposit and a generation of newly wealthy professionals and entrepreneurs looking for guidance, Ireland is edging towards a more sophisticated investment culture. In this Think Business podcast Alan Dunne discusses why products and the policy framework to put it to work are only beginning to catch up.
When you go to places like the US or the UK, there are pools of capital that have been built up over many generations,” he says. “That is not a feature we have had to the same extent in Ireland. We are starting to see it now.”
Those transfers are historically thin because, until recently, there was little to transfer. Property was the primary store of value. For most families, that meant a site or a house, not a portfolio. The Downton Abbey model of dynastic wealth, as Dunne puts it, was not something most Irish households recognised from experience.
Part of the explanation for why so much Irish money stays on deposit lies in the tax structure. The deemed disposal rule, which requires investors in funds to pay tax on unrealised gains every eight years, is an explicit disincentive to long-term investing. It has no equivalent in the UK or the US, and wealth managers have long argued it distorts behaviour in ways that harm both individual investors and domestic capital formation.
“At the moment it is very much an outlier in an international context,” Dunne says.
Rates on fund investments came down in last year’s Budget, and there is momentum towards further reform, but the framework still penalises exactly the kind of patient, diversified investing that financial advisers recommend.
