As I announced in Budget 2014, the rate of Deposit Interest Retention Tax (DIRT), and the rates of exit tax that apply to payments from life assurance policies and investment funds, are being increased and will now be 41% whether payments are made annually or more frequently (previously 33%) or are made less frequently than annually (previously 36%). The increased rates will apply to payments, including deemed payments, made on or after 1 January 2014. DIRT and exit taxes are deducted only from the interest or return from savings and investments; they are not deducted from the principal sum invested.
In certain cases, deposit interest can be paid without deduction of DIRT or individuals can get a refund of DIRT deducted. These cases are:
- Individuals aged over 65 years: Since the enactment of the Finance Act 2007, individuals can have their interest paid without deduction of DIRT, or can have a refund of DIRT deducted, provided they or their spouse or civil partner are aged 65 years or over, and their total income in a year, including the interest, is below the relevant annual exemption limit. The limits for 2014, are €18,000 for single or widowed persons or surviving civil partners, and €36,000 for married couples and civil partners;
- Permanently incapacitated individuals: an exemption from DIRT also applies where an individual, his or her spouse or civil partner:
(i) is permanently incapacitated by reason of physical or mental infirmity from maintaining himself or herself; and
(ii) is not liable to pay income tax because of the level of his or her income.
These exemptions may benefit some of the people mentioned by the Deputy in his question. I have no plans to widen the exemptions or reliefs from DIRT.