Members should be aware that following the enactment of the Finance (No. 2) Act 2013 there will be a number of changes to the treatment of Credit Union Share Accounts.
The standard rate of deposit interest retention tax (DIRT) that applies is to increase by 8% to 41%. The increased rate will apply to payments made (or deemed to be made) on or after 1 January 2014. In addition, the exemption for certain interest paid on “special term accounts” will be abolished for such accounts and credit union “regular share accounts” will also be subject to DIRT on interest/dividend payments made after 1 January 2014.
As a result of these changes all Credit Union Share Accounts will be the same in terms of taxation treatment. In future dividends posted to any Share Account (with the exception of a special term account which has not yet completed its three or five year term having been opened in advance of Budget 2014) will have DIRT (at the prevailing rate) deducted. This deduction of DIRT will fully discharge the tax liability in respect of dividends earned on these savings.
Members should review their circumstances with the Revenue Commissioners to ensure they are availing of any exemptions they are entitled to. In brief, in order to claim exemption from DIRT you must complete a declaration form stating that you or your spouse (if you are married) meet the following conditions:
• are aged 65 or over when making the declaration
• total income for the year will be below the relevant annual exemption limit
The annual exemption limits are announced in the Finance Act each year. This annual exemption limit may be increased if you have dependent children. For more information contact the Revenue Commissioners.
Further information regarding DIRT, together with Exemptions and Declaration forms, can be obtained from the Revenue website (www.revenue.ie). Forms should be completed in full by qualifying members and returned to the Credit Union at your earliest convenience so as to avoid future deduction of DIRT if you are exempt.