41% rate of dirt and withholding tax

[Brendan Burgess]

TAX ON SAVINGS
Deposit Interest Retention Tax and Exit Taxes on Life Assurance Policies and Investment Funds The rate of retention tax that applies to deposit interest, together with the rates of exit tax that apply to life assurance policies and investment funds, is being increased and will now be 41% whether payments are made annually or more frequently (previously 33%) or are made less frequently than annually (previously 36%). The increased rates will apply to payments, including deemed payments, made on or after 1 January 2014.

 

[The_Banker]

I presume this is to disincentivise saving and for money to flow into the economy?

It could be counter productive and lead to off shore accounts.

 

[Brendan Burgess]

I presume this is to disincentivise saving and for money to flow into the economy?

He said this

 

[Greekwife]

Sorry if this is not in the right place but what is Withholding Tax ?

 

[paulgreen]

Zero point in putting any savings in deposit accounts anymore I'd rather earn no interest than give this shower 41% I'll start spending big time now!

 

[Brendan Burgess]

I'll start spending big time now!

So, the measure is working already.

 

[paulgreen]

So, the measure is working already.

Ha Ha Brendan good point!

 

[Brendan Burgess]

Folks, I have deleted opinions on this. Please go to the Opinions forum

 

[carpedeum]

New 41% rate

Sorry if a stupid question:

New 41% rate for DIRT and exit tax applying to life assurance policies and investment funds - was this zero? Do we lose 41% of payout?

 

[JBJude]

At 41% DIRT what stops us from moving our savings up the road to Northern Ireland. Is there a disadvantage?

 

[Lightning]

At 41% DIRT what stops us from moving our savings up the road to Northern Ireland. Is there a disadvantage?

FX risk if it is a GBP account and EUR is your main currency.
Exact same tax rate if you are an Irish resident.
UK deposit rates have plummeted in recent months thanks to Cameron's mortgage assistance programme.

Little incentive to move your money up North.

 

[Chancer]

Move your money out of the EU

If you're a standard rate taxpayer, or your spouse is, and especially if theyve got non-transferable std rate band, if you deposit outside the EU (say Isle of Man? Channel Isl?) the interest is counted as income, and you'd only pay 20% on it.