Tax-efficient investment accounts still face 1% stamp duty charge on large Irish companies

People planning to put money to work through the Government’s new tax-efficient investment accounts will still face paying stamp duty of 1 per cent if they want to invest directly in large Irish public companies. Share purchases of Irish companies valued at over €1 billion are subject to stamp duty at a rate of 1 per cent. This follows a move last year by then minister for finance Paschal Donohoe to remove the charge in relation to companies below this threshold. In the UK, a rate of 0.5 per cent applies, with rates in other European countries generally lower.The new personal investment accounts, which will be available from next July, have been flagged by the Government as being exempt from tax on income, profits and gains arising on eligible investments. READ MOREHowever, the new Finance Bill that gives effect to many Budget 2027 measures does not extend the exemptions to stamp duty on shares in Irish public companies. “There is no specific provision contained in Finance (Number 2) Bill 2026 exempting investors from the 1 per cent stamp duty that applies to the trading of shares of Irish plcs with a market value of more than €1 billion, where such shares are purchased through the new investment account,” said a spokeswoman for the Department of Finance in response to questions from The Irish Times. [ Ireland’s new personal investment accounts: Here’s how the scheme will workOpens in new window ]“However, where the market value is below €1 billion, the relevant exemption continues to apply.”There are 11 companies listed in Dublin with market capitalisations above that threshold, ranging from Ryanair, which is valued at €23 billion, and the country’s two largest banks to home builder Glenveagh Properties and healthcare services group Uniphar. The levy also applies to large Irish companies listed overseas, including Greencore and Grafton Group in London and New York-listed CRH, Flutter Entertainment and Smurfit Westrock. In practice, however, there are ways for investors to avoid the charge on US-listed Irish companies, including trading in so-called American depository receipts, rather than shares, or where the trades are settled through a North American settlement system. Microsoft president Brad Smith: Ireland is “well-positioned for future of AI”“Although not addressed in the budget, we continue to advocate for the abolition of the 1 per cent stamp duty on shares in Irish companies listed in both Ireland and the US,” said Daryl Byrne, chief executive of Euronext Dublin, which runs the Irish stock market. “The duty makes investing in Irish-listed shares more costly and less attractive to investors, particularly when comparable share transactions in the US are not subject to stamp duty.[ We look at four different scenarios that could unfold for different types of investorOpens in new window ]“We look forward to working with Government and market participants to address this remaining barrier, strengthen Ireland’s capital markets, and support greater investment in Irish companies.”While the expectation is that most novice investors taking part in the Government scheme will shy away from investing directly in individual shares and bonds, in favour of putting money in investment funds, including exchange-traded funds, the underlying managers of equity funds face the stamp duty when purchasing shares in large-cap Irish companies. Under the scheme, people will be able to put €12,000 a year tax-free into the new accounts. The accounts will feature a low tax rate of just 1 per cent, levied on any amount in the account over a tax-free threshold of €50,000.