Vol. 411 No. 5
81 Mr. Bell asked the Minister for Finance if he has any plans to waive payment of DIRT on investments where the moneys were awarded to children as a result of a traffic accident; and if any special arrangements exist in this regard; and if he will make a statement on the matter.
Retention tax applies to deposit interest generally, and I have no plans to change that position. However, section 5 of the Finance Act, 1990 exempts investment income from income tax where the income arises from compensation paid following a civil action for damages for personal injury. For the exemption to apply the income must represent the sole or main income of an individual who, as a result of an injury, is permanently and totally incapacitated by reason of mental or physical infirmity from maintaining himself.
More generally, where a person who is totally incapacitated receives interest on a deposit which is liable to deposit interest retention tax — whether that deposit consists of compensation in respect of a traffic accident or otherwise — the DIRT deducted may be reclaimed.
I would also point out that there are a number of investment options which are not subject to retention tax, including Government securities and certain savings schemes operated by An Post.
