I propose to take Questions Nos. 51 and 52 together.
I am informed by the Revenue Commissioners that the information furnished on DIRT returns made by financial institutions does not require the yield from deposit interest retention tax on interest income arising from court awards to injured children to be identified. Accordingly, the specific information requested by the Deputy is not available.
As indicated in my reply to Parliamentary Question No. 104 on 6 May 2004, the entitlement of individuals to repayment of DIRT deducted is limited to situations where: (i) he or she or his or her spouse is either aged 65 years or over at any time during the tax year or permanently incapacitated by reason of mental or physical infirmity from maintaining himself or herself — or became so incapacitated — at any time during the tax year; and (ii) the income of the individuals — inclusive of the deposit interest — is below the appropriate income exemption limit for tax purposes. Partial refund may be due to the individuals, including minors, outlined in (i) whose income — inclusive of the deposit interest — does not greatly exceed the appropriate income exemption limit.
In addition, as regards awards in respect of personal injuries, section 189 of the Taxes Consolidation Act 1997 provides that certain income — including deposit interest — arising to individuals, including minors, from the investment of compensation payment awarded by the courts or under an out of court settlement in respect of a personal injuries claim is exempt from tax. However, the following conditions apply to this exemption: as a result of personal injuries, the individual is permanently and totally incapacitated by reason of mental and physical injury from maintaining himself or herself; and the income from the investment of the compensation awarded is the sole or main income of the individual.
Accordingly, a minor who, as a result of personal injuries, is permanently and totally incapacitated by reason of mental or physical injury from maintaining himself or herself has a statutory entitlement to repayment of DIRT deducted from the investment of compensation awarded. This is without reference to whether his/her income is below the income threshold for tax purposes.
While court awards for injuries are generally not subject to taxation, special income tax treatment of the income from such awards by way of exemption or repayment of DIRT is confined by and large to those individuals, whether adults or children, who as a result of these injuries are permanently and totally incapacitated and where the income from the award is the sole or main income of the individual. DIRT is applied on a very wide basis and there are very few repayment situations. To widen the DIRT repayment to the income from all court awards irrespective of the personal circumstances of the individual would narrow the DIRT tax base and undoubtedly lead to requests for similar repayments for other categories of individuals. Accordingly, I have no plans at present to extend the DIRT repayment rules to cover all injured minors.