Billy Timmins
Question:155 Mr. Timmins asked the Minister for Finance the position on the special savings incentive scheme accounts of persons (details supplied); and if he will make a statement on the matter. [5341/05]
View answerWednesday, 16 February 2005
Questions (113)
Written answers
The question relates to a situation where a special savings incentive scheme saver dies before the end of the five year savings period. The special savings incentive scheme allows savers to subscribe to their special savings incentive scheme account on a monthly basis for a 60 month period and the Government provides a top-up of 25% of the value of subscriptions made in each month. When a special savings incentive scheme account matures, which is at the end of the five-year period under normal circumstances, the saver is entitled to the funds in the special savings incentive scheme account less tax at 23% on the profit made from the investment of both the saver's subscriptions and the Exchequer contribution, subject to compliance with the conditions of the scheme. For example, in the case of a special savings incentive scheme account that was a deposit account from which no withdrawals had been made, tax at 23% would only apply to the interest earned.
Where the saver dies before the 60 month period has elapsed, the special savings incentive scheme account is treated as maturing on the date of death. When this occurs, the top-up of 25% only applies to subscriptions made up to the date of death. Tax is then deducted at 23% on the profit made from the investment up to the date of death and the balance of the funds are then available for distribution to the beneficiaries of the deceased's estate.