Taxes Consolidation Act, 1997 (Number 39 of 1997)
261A Taxation of interest on special term accounts.
(1) Where interest is paid by a relevant deposit taker in respect of a relevant deposit held in a special term account [6]>that is opened before 16 October 2013<[6], such interest shall be relevant interest for the purposes of this Chapter only to the extent provided for in this section.
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(2) Interest paid in a year of assessment in respect of a relevant deposit held in a medium term account shall be relevant interest only to the extent that such interest exceeds [1]>£278<[1][1]>€480<[1].
(3) Interest paid in a year of assessment in respect of a relevant deposit held in a long term account shall be relevant interest only to the extent that such interest exceeds [2]>[3]>£370<[2]<[3][2]>[3]>€635<[2]<[3].
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(2) Interest paid in a year of assessment in respect of a relevant deposit held in a medium term account shall—
(a) be relevant interest only to the extent that such interest exceeds €480, and
(b) as respects the first €480 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.
(3) Interest paid in a year of assessment in respect of a relevant deposit held in a long term account shall—
(a) be relevant interest only to the extent that such interest exceeds €635, and
(b) as respects the first €635 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.
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(4) Where an individual opens a medium term account, the individual may subsequently make an election in writing to the relevant deposit taker to have the account converted to a long term account.
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(5) Where an election is made in accordance with subsection (4), interest paid in a year of assessment which commences on or after the date the election is made shall be relevant interest only to the extent that such interest exceeds [2]>[3]>£370<[2]<[3][2]>[3]>€635<[2]<[3].
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(5) Where an election is made in accordance with subsection (4), interest paid in a year of assessment which commences on or after the date the election is made shall—
(a) be relevant interest only to the extent that such interest exceeds €635, and
(b) as respects the first €635 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.
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(6) Subject to subsection (8), section 261 shall apply in relation to any relevant interest paid in respect of a relevant deposit held in a special term account, as if the following paragraph were substituted for paragraph (c) of that section:
“(c) the amount of any payment of relevant interest paid in respect of any relevant deposit held in a special term account shall not, except for the purposes of a claim to repayment under section 267(3) in respect of the appropriate tax deducted from such relevant interest, be reckoned in computing total income for the purposes of the Income Tax Acts;”.
(7) An account shall cease to be a special term account if any of the conditions specified in section 264A(1) cease to be satisfied, and where that occurs—
(a) all interest paid on or after the occurrence in respect of relevant deposits held in the account shall be relevant interest,
(b) all interest (in this paragraph referred to as “past interest”) paid prior to the occurrence, in respect of relevant deposits held in the account, shall be treated by the relevant deposit taker as relevant interest to the extent that such interest has not already been treated as relevant interest, and—
(i) the provisions of section 257(1) shall apply as if the payment of past interest was being made on the date of the occurrence, and
(ii) where on that date the past interest has already been withdrawn from the account—
(I) the relevant deposit taker shall deduct from the relevant deposits held in the account on that date, an amount equal to the amount of the appropriate tax which would have been deducted from the past interest under subparagraph (i), but for the withdrawal, and such amount shall be treated as appropriate tax, and
(II) the provisions of paragraphs (b) and (c) of section 257(1) shall apply to such deduction as they apply to a deduction from relevant interest.
(8) Subsection (6) shall not apply to any interest in respect of any relevant deposit held in the account which is paid, or by virtue of subsection (7) treated as paid, on or after the date on which the account ceases to be a special term account.
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(9) An account shall cease to be a special term account on a date which is—
(a) 3 years after the day on which the account was opened if the account is a medium term account, or
(b) 5 years after the day on which the account was opened if the account is a long term account, including an account which was opened as a medium term account but which was subsequently converted into a long term account.
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[1]
Substituted by FA01 s57(1)(a)(iii)(I). Applies as respects the year of assessment 2002 and subsequent years of assessment. With effect from 1 January 2002 per SI 596 of 2001.
[2]
Substituted by FA01 s57(1)(a)(iii)(II). Applies as respects the year of assessment 2002 and subsequent years of assessment. With effect from 1 January 2002 per SI 596 of 2001.
[3]
Substituted by FA01 s57(1)(a)(iii)(II). Applies as respects the year of assessment 2002 and subsequent years of assessment. With effect from 1 January 2002 per SI 596 of 2001.
[6]
Inserted by F(No.2)A13 s23(1)(c)(i). Applies to interest or dividends (within the meaning of Part 8) paid on or after 1 January 2014.
[7]
Inserted by F(No.2)A13 s23(1)(c)(ii). Applies to interest or dividends (within the meaning of Part 8) paid on or after 1 January 2014.