# Post office savings certificates.



## Grizzly (19 Apr 2006)

My elderly father has substantial sums of money invested in Post Office savings certs. He is convinced that he does not have to declare these to the revenue commissioners nor does he believe that he has to pay any income tax on the interest earned on these. He says that "the man in the post office told him this". Can this be true? Is DIRT deducted from interest earned on these?


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## Berni (19 Apr 2006)

He is correct, there is no dirt payable on these

http://www.anpost.ie/AnPost/MainContent/Personal+Customers/Money+Matters/Savings+and+Investments/


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## Grizzly (19 Apr 2006)

But does he have to declare the interest received as income and is this additional income, taxed, or is this interest income, tax free?
The blurb says they are tax free, does this mean income tax free, inheritance tax free or just plain old DIRT free?


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## jpd (19 Apr 2006)

The interest is tax free - ie free of ALL tax including DIRT assuming he doesn't hold more than the maximum amount allowed eg 80,000 euro of savings certificates, 80,000 euro of savings bond - double that for a couple 

However the interest rate paid should be compared to the Net ie after DIRT, rate on savings products offered by the banks and building societies. unless he can reclaim DIRT paid ie from revenue site 





> If your total income is below your exemption limit a refund of DIRT tax can be claimed if you or your spouse is aged 65 or over,


 
Of course, these National savings are safer than savings in a bank or building society, which could go bankrupt.


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## Grizzly (19 Apr 2006)

So anybody it would appear can lodgr €80k in Post Office savings certificates and not have to declare the interest as income. The accumulated interest can also be passed on to your next of kin with no deduction of inheritance tax. My father has had these since the dark ages and on each maturity capitalised the interest then rolled over the interest in to new issues. At this stage therefore, a large chunk of his principle is made up of previous interest credited. Which in theory should mean that if he were to die then all the accumulated interest over the years, now principle is tax free?


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## jpd (19 Apr 2006)

Sorry to disappoint you but savings certs are not exempt from CAT only from income tax


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