Vol. 478 No. 1
39 Mr. Sargent asked the Minister for Finance the estimated value in revenue terms to the State arising from the recent change of practice introduced by the Revenue Commissioners in relation to the taxation of moneys held in credit union shares and deposit accounts; and if he will make a statement on the matter. [10405/97]
Sections 226 and 227 of the Finance Act, 1992 provide for the automatic return to the Revenue Commissioners of certain information from financial institutions where they pay deposit interest without deduction of tax. In 1992 the Revenue Commissioners issued a statement of practice to the effect that returns by financial institutions need be made only of amounts paid or credited in excess of £500.
There has been no recent change of practice by the Revenue Commissioners in relation to the taxation of income from shares or deposits held in credit unions. Therefore credit unions are obliged to make a return to the Revenue Commissioners only where the amount of deposit interest paid to the depositor in the year exceeds £500. However, dividends and interest paid by credit unions are chargeable to income tax in the hands of the recipients at the rates relevant to those recipients, including the higher rate where appropriate.
