Banks Lobbying For New NTMA State Savings Rate Cut

[TheJackal]

Discussed on Morning Ireland this morning the possibility of An Post dropping their rates again due to bank pressure

http://www.rte.ie/radio1/podcast/podcast_morningireland.xml

See "Banks concerned about increase in DIRT tax on savings"

 

[Lightning]

Thanks The Jackal, I have moved this to a separate thread.

This is an important point for anyone considering opening a NTMA State Savings product.

 

[harriet]

Thanks for that. My husband heard the interview. We were considering moving our savings to PO. May have to have a rethink and look into it more closely and consider offshore

 

[Lightning]

Why offshore?

 

[theresa1]

http://www.independent.ie/business/...-rates-on-state-savings-schemes-29672714.html

"Banks are expected to put pressure on the Government to again reduce the interest rates paid on tax-free state savings schemes to deter savers from putting all their cash in the schemes."

 

[dub_nerd]

Thanks for that. My husband heard the interview. We were considering moving our savings to PO. May have to have a rethink and look into it more closely and consider offshore

Don't forget if you invest before a rate change you keep the rate you invest at for the duration of the product's term.

 

[Brendan Burgess]

Why offshore?

Aren't most offshore accounts subject to tax at the marginal rate?

So they are attractive if you pay no tax or the 20% rate on your other income.

Brendan

 

[Lightning]

Hi Brendan,

I have done some reading into this today to see if offshore accounts can be used by standard taxpayers to avoid the new high rate of DIRT. Unfortunately, no.

EU deposit interest is taxed at the same rate regardless of which EU country you have your deposit in. The reason being that all EU income needs to be treated the same way.

My understanding was always that non-EU deposit interest was taxed at the marginal rate. That used to be the case.

Non-EU deposit interest is taxed at the marginal rate if you are in the upper band. i.e. 41% if your income is in the 41% bracket.

However, the Finance Act 2013, has a separate provision, for non-EU deposit interest, where the person is a standard tax payer, and the interest was earned after 8 February 2012, which stipulates that the DIRT tax rate supersedes the standard tax rate. i.e. a standard taxpayer would need to pay 41% from 1 January 2014.

I assume the Finance Act 2014 will clear up if non-EU deposit interest is subject to PRSI.

 

[mcriot29]

Will dirt rates drop in the next 10 years

 

[Lightning]

In the Eu is it same rate as dirt but outside its your income tax rate

Please read my post above. In the EU, same rate as DIRT. Outside the EU, marginal tax rate if you are in the upper band but DIRT rate if you are a standard taxpayer, as per recent legislative change.