Rabo charged me 27% dirt on interest for 2010 instead of 25%

MONAGHANSG said:
SS expert,

I'd expect it to be at the new rate 27%, as the rate is based on pay date.
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Interesting. Are there any online resources that defines this an what pay date actually means ( DIRT pay date? ).

This would be particularly busing for somebody coming out of a 5 year term deposit.

I would demand interest accrued for for each year be charged at the prevailing rate for the year.

Perhaps this is another threads discussion.

As an aside I got my overcharged DIRT back.
 
I spoke to a tax expert the other day and mentioned the Rabo apparent mistake in deposit interest.

He confirmed that DIRT is charged based on the pay date and not the accrual period.

Rabo have no right to back date interest tax. It all depends on when they pay it. If Rabo paid the interest in 2011, as appears to be the case, then the rate should have been 27%.

Hence, he was of the opinion that Rabo should not have issued refunds to customers as the interest was paid in 2011.

Have Rabo made a mistake by refunding the tax? Was the interest visible (not value dated) in accounts on December 31st?
 
If this is the case N/R are wrong as well, no 2010 interest was visible in my A/c on 01/01/11, it only appeared on 02/01/11 with a value date of 31/12/10, DIRT was deducted at 25%
 
Nationwide UK has now refunded the difference in DIRT rates on my a/c. So looks like you don't need to wait until next pay date with them after all.
 
CiaranT said:
I spoke to a tax expert the other day and mentioned the Rabo apparent mistake in deposit interest.

He confirmed that DIRT is charged based on the pay date and not the accrual period.
Click to expand...

Very interesting. Pre April 2009 this was 23%, we are now at 27% which is particularly bad for those locked into Term Deposits for a period longer than 1 year.
 
I have a Nationwide UK savings account - interest next payable on 31/03/2011 - when the effective DIRT rate is 27%

However, couldn't Nationwide UK (or any financial institution) calculate interest to 31/12/2010 and deduct 25% DIRT on that and then apply the 27% rate for the period Jan to March. It would be extremely popular with customers and great PR for them. I'm sure something similiar happened yonks ago when DIRT rates changed (and it really was a very long time ago).
 
then they would have to pay interest on interest, and you locked away your money for that time, and they fixed their side of the deposit with the external market.

What if Dirt rates went down, would you still want the same to apply, or keep the rate on the date of deposit maturity.

When you enter into a deopsit, you should be aware(and probably explicitly stated) that Dirt at the prevailing rate will apple on the maturity of the deposit.

You have netered into a legally binding contract, so would be unlawful of them to amend the T&C's, as what if interest rates move, should they be allowed to change your rate, dont think so, amending the T&C's to pay lower rate of Dirt would not go down well with the Revenue commissioners.

Afraid you lose out for fixed deposits thta straddle the 2 different Dirt tax rates when rates go up, and gain when they fall.
 
Nationwide UK have the option of monthly or annual interest in their Easy Access Savings account. The rate in the monthly case is just a little lower, but I suppose it could be offset against potential loses as in this year's case. But I also suppose the opposite could happen if DIRT was decreased...
 
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