Discussion in 'Credit Union issues' started by cork, Dec 7, 2011.
Are there accounts in some credit unions that are dirt free?
Regular Share Accounts. You get a dividend that is decided at the end of each year rather than an interest rate. The dividend should be declared in your tax return.
I thought DIRT was only charged on deposit interest, not on dividends (do divs not have a separate WHT tax rate)?
As far as I know you can opt to have your credit union deduct tax at source from your dividend or have it paid gross. Either way you should include it in your tax retund.
Nah! DIRT applies to deposit interest and dividend paid in credit unions. Only members who opt to have DIRT taken off will have it deducted. It is still optional, surprisingly.
There are, as pointed out above, Special Share Accounts which are DIRT free but are minimum term accounts, 3 & 5 years I think.
Regular share accounts: no dirt deducted but you must make a tax return declaring the dividend interest and pay taxes accordingly (or none if you are exempted by being under the income threshold)
Special share accounts: dirt deducted at prevailing rate (currently 27%). No further liability to income tax but is required to be disclosed for self assessment tax returns for levies
Revenue allow for DIRt exemptions on term accounts as follows:
3 year term - exempt from DIRT on first €480 per annum
5 year term - exempt from DIRT on first €635 per annum
However, the funds must be kept for the full term or revenue will claw back the exemption given even for prior years!!!
Do people think it'd be worthwhile changing to a regular share account and declaring the dividend yourself? DIRT is now 30% while I'd only pay 20% if I were to pay the tax myself.
Looks like it alright:
Credit Union issues > Brendan Burgess explains: The taxation of Credit Union dividends
How would i go about filing this in a tax return myself? I haven't a clue about it and just went with a special shares account as they deducted DIRT automatically.
I imagine most people just do this as it's easier.
Is this also the case with other financial instutions? I have an account with Rabo and they deduct DIRT at source. Can I also pay that at my tax rate?
I suspect that, as for many years, most CU members don't declare money that is not taxed at source.
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