Richard Bruton
Question:225 Mr. R. Bruton asked the Minister for Finance the levels of tax and thresholds for DIRT on deposit accounts, credit union accounts, special saving accounts and special investment accounts. [24866/98]
Written Answers - Deposit Interest Retention Tax.
Deposit interest retention tax (DIRT) is deducted from deposit interest at the standard rate of income tax, 24 per cent. A reduced DIRT rate of 20 per cent applies to interest on special savings accounts which can only be held by individuals. Those aged 65 years or over and those who are permanently incapacitated, whose total income falls below their relevant allowances/exemption limit are entitled to a refund of DIRT paid.
Dividends on credit union shares and interest on credit union deposits are not subject to DIRT.
However, individuals are obliged to report dividends or interest received in their annual tax return and are liable to income tax at their marginal rate on this income.
Special investment accounts (SIAs) are investment products offered by life assurance companies, unit trusts and stockbrokers and are not liable to DIRT, as such. However, the return on SIAs (whether by way of income or capital gain, both realised and unrealised) is taxable on an annual basis at 10 per cent.
A summary table of conditions attaching to special savings accounts and special investment accounts follows. This sets out the relevant conditions and the maximum individual limits for investments in these products.
Special Savings and Investment Accounts
|
Type |
Special Savings Accounts |
Special Investment Accounts |
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|
Special Investment Policies |
Special Investment Schemes |
Special Portfolio Investment Accounts |
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|
Offered by: |
Banks, Building Societies and other Financial Institutions |
Life Assurance Companies |
Authorised Unit Trust Schemes |
Designated Stockbrokers |
|
Tax rate on Income and/or Gains: |
20% |
10% |
10% |
10% |
|
Maximum Investment per Individual |
£50,000 |
£75,000¹ |
£75,000¹ |
£75,000¹Limit increased by amount held in DCM companies subject to a maximum of £10,000 |
|
Primary Conditions |
30 days notice Minimum 3 months duration |
At least 55% in Irish equities of which at least 10% in smaller companies² |
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|
Other Investment Conditions |
Interest rate cannot be fixed for longer than 2 years |
None |
None |
Remainder of account must be invested in Irish gilts |
¹ The maximum investment per individual in all products cannot exceed £75,000 Choices are as follows:
|
SSA |
SIP OR SIS or SPIA |
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|
£50,000 |
and |
£25,000 |
|
|
or |
|||
|
£25,000 |
and |
£50,000 |
|
|
or |
|||
|
NIL |
and |
£75,000 |
² Quoted companies with a market capitalisation of less than £200 million