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Finance (No. 2) Bill, published on 19 October 2026, contains the legislative framework for the operation of Ireland’s new special investment accounts, referred to as ‘Individual Investment Accounts’ (IIAs).
With the publication of the draft legislation, our focus now shifts from the Department of Finance’s Roadmap for the Taxation of Retail Investment (Roadmap), which set out the key policy objectives for the scheme, to how the new measures will be implemented in practice. The draft legislation also indicates that regulations will be published which will provide more details on the administration of the scheme (IIA Regulations).
Key features
The draft legislation confirms many aspects of the scheme which were expected:
The draft legislation provides that ‘qualifying account providers’ may provide and operate IIAs from 1 January 2027. This differs from the Minister for Finance’s Budget 2027 announcement that IIAs would be available from 1 July 2027.
IIAs will be personal to the individual
The accounts will be held in an individual’s sole name, joint accounts will not be permitted.
Although the rules provide for a mechanism to transfer from one account provider to another, there is no mechanism to transfer ownership in an IIA from one individual to another. On the death of an account holder, the rules provide that no further contributions may be made to the account, and the account will either be closed by the late account holder’s personal legal representatives or subject to a no-grant closure mechanism.
In addition, other than permitted transfers between IIA account providers, the rules provide that where an IIA is closed by an individual in a tax year, that individual may not open another in that tax year.
Not intended to be a cash holding vehicle
In line with the policy objectives stated in the Roadmap (i.e. to encourage investment and discourage long-term parking of cash in IIAs), the draft legislation confirms that no interest may be paid on any cash balances within an IIA.
Maximum annual contribution
The draft legislation confirms that all contributions in a tax year, without regard to any withdrawal, will be aggregated in assessing whether the €12,000 contribution limit has been breached. It also provides that IAT, at a rate of 1%, will be applied on excess contributions made in any tax year.
Qualifying account providers
Certain ‘eligible’ entities may become ‘qualifying account providers’ by fulfilling registration requirements with Irish Revenue. Revenue must maintain a register of qualifying account providers and make it publicly available on its website.
The draft legislation sets out a list of entities which will be regarded as eligible entities for this purpose:
The IIA framework will not grant a new authorisation or regulatory permission to eligible entities. Eligible entities that wish to become qualifying account providers must do so within their existing authorisation or, where applicable, apply to their competent authority to add an appropriate regulatory permission to their existing authorisation.
Revenue may cancel a registration where the account provider is not, or has ceased to be, an eligible account provider, or has failed to comply with, or to discharge, any duty or obligation imposed on it under the IIA framework. The treatment of individual IIAs held by the account provider on the occurrence of a cancellation event will be provided for in the IIA Regulations.
Eligible assets
IIAs may hold four broad categories of eligible investments:
Derivatives and cryptocurrencies have not been included as eligible assets, which comes as little surprise given the Department’s comments in the Roadmap about the complexity and risks of these assets.
For the purposes of the IIA framework, an ‘equivalent third-country market’ is a stock exchange in a third country that is subject to supervisory and regulatory arrangements at least equivalent to those applied to a regulated market in Ireland. We would expect this to include, for example, the London Stock Exchange, New York Stock Exchange and Nasdaq.
An account provider may face penalties (€3,000 per account, per tax year) where an IIA which it administers holds ineligible assets. No penalty will be imposed where an asset was an eligible asset at the time of its acquisition but subsequently becomes an ineligible asset, provided that the account provider, on becoming aware of the presence of the ineligible asset, takes all reasonable steps to dispose of it or otherwise remove it from the IIA without undue delay.
Tax administration on IIAs
The draft legislation confirms that IAT charged on an IIA will constitute the final tax liability on all returns arising within the account. It also makes a number of technical amendments to facilitate the operation of IIAs, including: (i) new exemptions from dividend withholding tax and interest withholding tax for distributions and interest payments received in respect of eligible investments held in IIAs; and (ii) amendments to the investment undertaking tax (IUT) and life assurance exit tax (LEAT) regimes, confirming that investments in relevant Irish funds or life assurance companies held through IIAs will no longer be subject to those regimes. This is particularly welcome, as it will bring such investments outside the scope of the eight-year deemed disposal rule. The amendments also confirm that an account holder who acquires a material interest in an offshore fund through an IIA will not be required to file a return with Irish Revenue disclosing the acquisition.
While the account holder remains liable for any IAT due, it is the obligation of the account provider to collect the tax, remit it to Irish Revenue on an annual basis and make annual returns to Irish Revenue. The legislation specifically empowers account providers to deduct, realise or otherwise apply cash balances to the payment of IAT, or to appropriate or sell assets within the IIA to fund the tax payment.
IAT will be charged where the annualised value of the account in a tax year exceeds the tax-free threshold amount. Account providers will need to ensure that their systems capture sufficient data to calculate the average daily value of IIAs throughout each tax year. This value-based system of taxation represents a departure for firms which may have traditionally been used to operating returns-based taxation in the form of exit tax or dividend withholding tax.
The draft legislation confirms that, unlike some other forms of retail fund investments, ownership of an IIA will not make the individual account holder a chargeable person for income tax purposes (i.e. it will not mean that they are required to file an annual income tax return on Form 11). This is in line with the Government's objectives to promote retail investment by simplifying compliance processes for investors.
Income earned within an IIA will not count as income for other income tax purposes, including towards the account holder’s standard rate band. Income tax losses or credits cannot be used to reduce IAT due on the account.
The chargeable period for IIAs will run to 31 December annually, and account providers will need to make returns for IIAs that they administer on or before 31 March of the following year.
Client onboarding and diligence
The draft legislation provides that account providers must obtain a signed declaration from individuals looking to open an IIA confirming various details, including date of birth and PPSN. In addition, the legislation places a positive obligation on account providers to take ‘reasonable measures’ to verify the date of birth and PPSN provided in a signed declaration.
Annual statement to be provided to investors
Account providers will be required to provide an annual statement to investors showing:
Fees
The draft legislation does not contain any provision which caps or otherwise regulates the fees which account providers may charge on IIAs. While the Department opted not to impose fee caps in the legislation, it indicated in its Roadmap that the expectation is that fees applied by providers will be minimal and competitive by international standards.
Next steps
Prospective providers of IIAs should now be considering how they will implement the new scheme, as early preparation will be key ahead of its launch. They will need to consider in detail how their offering will be structured, including client onboarding arrangements, safeguards to ensure that only eligible investment assets are acquired, and controls to ensure that contributions by account holders stay within annual limits, form of the annual document to be provided to account holders, etc.
For further information, please contact the Partners on our Financial Regulation Advisory team (Eoin O'Connor, Patrick Brandt, Eimear O’Brien and Louise Hogan), Partners on our Tax team (Paul Fahy, James Somerville and Amelia O’Beirne), Partners on our Insurance team (James Grennan, Laura Mulleady and Stephen D’Ardis), Emma Hartnett, Tax Strategy Advisor, or Sarah Lee, Senior Practice Development Lawyer.
Date published: 23 October 2026
