# DIRT exempt Credit Union accounts



## STEINER (22 Oct 2013)

Are these types of account still on offer in credit unions? Info taken from revenue.ie

Revenue Staff Instruction
8.5.1 Taxation of Credit Union Dividends and Inter.... credit union dividends, DIRT, special term accounts, long term, medium term. 8.5.1 Taxation of Credit Union Dividends and Interest As and from the 1st January 2002 Credit Unions are “relevant deposit takers” and must deduct Deposit Interest Retention Tax from deposit interest paid to account holders. The following summarises briefly the tax treatment of dividends posted to the most common Credit Union Accounts. In order to qualify as a Special Medium Term Share Account or a Special Long Term Share Account the following conditions have to be satisfied a) The account when opened must be designated as a Special Medium Term Share Account or a Special Long Term Share Account by the Credit Union. b) The account holder must be over 16 years of age.... Date:19/10/2011 

Taxation of Credit Union Dividends and Interest 

As and from the 1st January 2002 Credit Unions are “relevant deposit takers” and 
must deduct Deposit Interest Retention Tax from deposit interest paid to account 
holders. 

The following summarises briefly the tax treatment of dividends posted to the most 
common Credit Union Accounts. 

• Share Account: The dividends in a Share Account are posted gross to a 
members account every year and the responsibility lies with the account 
holder to declare the dividend to Revenue. The dividend received on a Share 
Account is taxable at the account holder’s marginal rate of tax. 
• Special Share Account: The dividends on a Special Share Account are posted 
to a members account every year after the deduction of DIRT. The DIRT 
deduction is a final liability in respect of the dividend paid to the Special 
Share Account. 
• Special Medium Term Share Account (3 year): The 1st €480 of dividends 
posted annually to a Special Medium Term Share Account are exempt from 
DIRT. Any dividends in excess of €480 are liable to DIRT. The DIRT 
deduction is a final liability in respect of the dividend paid to the Special 
Medium Term Share Account. 
• Special Long Term Share Account (5 year): The 1st €635 of dividends are 
exempt from DIRT. Any dividends in excess of €635 are liable to DIRT. The 
DIRT deduction is a final liability in respect of the dividend paid to the 
Special Long Term Share Account. 





Special Medium Term Share Account (3 year) and Special Long Term Share 
Account (5 year). 

In order to qualify as a Special Medium Term Share Account or a Special Long Term 
Share Account the following conditions have to be satisfied 

a) The account when opened must be designated as a Special Medium Term 
Share Account or a Special Long Term Share Account by the Credit Union. 
b) The account holder must be over 16 years of age. An account cannot be held 
in the name of an individual who is under 16 years of age. 
c) The Account must be in the name of the person beneficially entitled to the 
interest. Nominee Accounts are not allowed. 
d) An individual can only open either a Special Medium Term Share Account or 
a Special Long Term Share Account. They cannot open both. However a 
married couple may hold 2 joint accounts in their names. 



e) An account may not be held by more than 2 individuals. 
f) All shares in the account must be held on the same terms, the rate of interest 
paid on the account cannot be fixed for more that 12 months and the interest 
payable on the account must not be linked to any stock exchange performance. 
g) At the time of opening the Special Medium Term Share Account or a Special 
Long Term Share Account an individual may transfer all or part of existing 
Credit Union savings to the Account. 
h) The maximum that may de deposited in a Special Medium Term Share 
Account in any month is €635. However an individual may make a once off 
deposit of not more than €7,620 once during the lifetime of the account. 
i) Funds deposited in a Special Medium Term Share Account must be left on 
deposit for 3 years from the date the funds were deposited before they are 
withdrawn without penalty. This provision does not apply where the account 
holder, or one of the account holders in the case of a joint account, dies. 
j) Funds deposited in a Special Long Share Term Account must be left on 
deposit for 5 years from the date the funds were deposited before they are 
withdrawn without penalty. This provision does not apply where the account 
holder, or one of the account holders in the case of a joint account, dies. 
k) An account holder aged over 60 years of age can only make one withdrawal 
from a Special Medium Term Account or Special Long Term Account if the 
account was opened when the account holder was under 60 years of age. 
l) Dividends credited to a Special Medium Term Share Account or Special Long 
Term Share Account may be withdrawn without penalty providing the 
withdrawal is made within 12 months of being credited to the account. 
m) If an individual withdraws funds from a Special Medium Term Share Account 
which have not been on deposit for 3 years (5 years in the case of a Special 
Long Term Share Account) the Account ceases to be a Special Medium Term 
Share Account and all dividends paid since the account was opened will be 
subject to DIRT.


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## Crugers (23 Oct 2013)

http://www.askaboutmoney.com/showpost.php?p=1355819&postcount=4


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## pudds (23 Oct 2013)

> Special Term Accounts are deposit accounts that have a set term and have limits to the amounts that can be deposited in them. They can be medium term or long term. DIRT is charged at 33%. However, you can hold a dividend of €480 tax-free with a medium term account or €635 tax-free with a long term account, after which you will be charged DIRT at 33%.



http://www.citizensinformation.ie/e...vestments/deposit_interest_retention_tax.html


Seem to be still available but sure arn't most unions paying little or zero interest these days.


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## Crugers (26 Oct 2013)

From http://finance.gov.ie/viewdoc.asp?DocID=7878


"_ The  standard rate of retention tax that applies to deposit interest is  being increased by 8 percentage points and will now be 41% for payments  made at least once annually. The higher rate of Deposit Interest  Retention Tax (DIRT), currently 36% for interest paid less frequently  than annually is to be abolished, so that all deposit interest is liable  to tax at the same rate (41%). The increased rates will apply to  payments, including deemed payments, 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 opened after Budget night  *and credit union “regular share accounts” will be subject to DIRT on  interest/dividend payments made after 1 January 2014*._"


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