Do I need to pay tax on savings ?

Having some savings with An Post - savings certs and instalment savings- and was thinking of taking a year off work to do some work on my house (which I could do myself if I had the time).

I assumed I could cash a savings cert and live off it till it ran out and then cash another since they are advertised as "tax free" but a friend insists that Revenue would regard them as income if i was living off them and I would have to pay tax & usc etc. I think this is wrong as they were saved from income I already paid tax on. I need to know to try and budget for a year with no earnings.

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Brendan
Administrator

wanderlust,

you won't have to pay any tax. Your mate is way off the mark. You don't pay tax on the money you take from the atm to buy the weeklt groceries. Its the same thing with your saving certs. There are tax free - which means they are free from DIRT. So you can relax.

Thanks Ludi! Thats what I thought myself.