CC card tax

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Murt10

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I have an MBNA mastercard.

I recently opened up an NIB mastercard account because they "only" charge 1.75% on non euro transactions rather than the 2.65% that MBNA charge.

I have already paid the E40 tax on the MBNA card. I read in another thread that I may be liable to pay a further E40. Is this true? I thought the rules were changed in the last budget in that you only have to pay the Govt tax once only..

Murt
 
If you keep the MBNA card after getting the NIB card then you will be charged the credit card stamp duty of €40 twice (eventually). If you switch from one to the other and make sure to close the first account before transferring then you can avoid being charged on the double. See [broken link removed].
 
So is it still possible to do a balance transfer and avoid the double charge to stamp duty? I would have thought that both accounts would need to be active for a balance transfer to take place, and so you would have to pay €40 twice for the same year.

Or do you close the first account and then transfer the balance outstanding to your new card? I haven't transferred between cc providers before but am in the process of doing so at the moment.
 
Not sure - the Revenue summary does not make this clear. However this suggests that you must close the first account before opening the second:
After 2 April 2005 you may switch your account as much as you like and you will still only be charged tax on the original account, provided you obtain a Letter of Closure each time you close the account. The second and subsequent bank/card issuer will issue a Letter of Closure once it has proof that the duty has been paid on the first account.

It should be noted that a Letter of Closure is an important document as the Bank is only in a position to issue one original letter. On receipt of the letter the cardholder should store it in a secure place and pass it their new bank as quickly as possible to ensure they receive the exemption from double stamp duty.
Click to expand...
There might be more detailed information clarifying this point [broken link removed].
 
Yes, it doesn't seem clear to me either, and the Revenue don't seem to allow for this situation (but by implication a letter of closure cannot be issued until an account is actually closed). I don't have much faith in someone in the cc company being able to give a clear answer either. I can only ask.
 
Thanks for that ClubMan. I'll close off one of the accounts immediately.

Murt
 
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