Dan Malone

That's the whole point.

The differential in the tax rate between 38%, as it is now, and 33%.

is not so big that it completely eradicates all of the benefits of long-term ETF index fund investing.

It doesn't.

And that's why it's such an annoying policy, to be frank, because it's causing this, we call it distortionary behavior in investors, where they're choosing products, investment products, that aren't as suitable to their own personal circumstances because of tax policy.

Yeah.

And that should never be the case.

Yeah, so when you invest yourself, you have to look after your taxes yourself with the investing platforms, whereas a lot of the life companies, because the investments are structured as life insurance products as well, they'll handle the tax for you.

But the tax isn't really that complicated.

And I'm very, very hopeful that deemed disposal will be removed in an upcoming budget.

I've been advocating for it since 2021.

You know, the Funds Review 2030 report recommended its removal.

You haven't sold.

So it taxes what's called unrealized gains.

And what an unrealized gain is, is when effectively you have made a paper gain on your investment.

So the value of your investments has gone up, but you haven't sold.

So those gains aren't technically real.

They're real on paper, but you don't have access to those gains because you haven't sold the investment and taken the cash.

Deemed disposal doesn't care about that.

It looks at whatever your unrealized gain is on the eighth anniversary of every purchase and it charges you 38% tax on that paper gain.