On 10 November, Insurance Ireland once again called for the abolition of the Life Assurance Levy and reform of the Life Assurance Exit Tax. Insurance Ireland claims Life Assurance savings and investments products, which tend to be availed of by middle income earners, are disproportionately affected by these measures.
Since the introduction of the 1% Life Assurance Levy on policy types of life assurance, including savings and investments, in 2009, the income generated by the levy has increased by 250%.
The Life Assurance Exit Tax rate is currently 41%. Traditionally, the Life Assurance Exit Tax and the Deposit Interest Retention Tax (DIRT) have been linked; however the reduction in DIRT in the recent budget, to bring it down to the CGT rate of 33% by 2020, has not been matched by a similar reduction in the exit tax.
Kevin Thompson, CEO of Insurance Ireland, urged the government to remove the unequal application of the levy and reduce the exit tax in the Finance Bill.
A link to the press release is here.