IBKR Interest income

B

banchang

Registered User
Messages
87
IBKR pay interest on cash balances. However I expected them to deduct 33% DIRT, but instead they deduct 20% WHT which is standard rate of income tax.

I dont know where in Form 11 to report this - Form 11 under the Other Irish Income panel has a line 'Gross Deposit interest received on which DIRT was deducted'. The IBKR income is Deposit interest as far as I can see, but it is not subject to DIRT. Grateful for thoughts on how to report this in Form 11.
 
It's not deposit interest because IBKR is not an authorised deposit-taking institution; they're not within the scope of Taxes Consolidation Act s. 256, which imposes an obligation on deposit-takers to withhold DIRT from interest that they pay.

So your account with IBKR is not a deposit that is subject to DIRT; it's a loan from you to IBKR. IBKR is paying interestt on that loan and is obliged by TCA s. 246 to withhold standard rate income tax.

I think you should declare the gross amount of interest in Form 11 as income (item 403(c)) and then claim a credit for the amount withheld (item 936(c)(iii)).
 
I would use line 304. EU Deposit Interest. Put the gross amount in (a) and the 20% withholding tax in (b)

1761215664839.webp
 
Last edited:
There is another thread about this. I have been reporting it as "Gross amount of Other Income received where Irish Standard Rate Tax was deducted at source", which makes the most sense to me. It will be treated as income rather than deposit interest, though, so this might make IBKR unfavourable for high earners.
 
Last edited:
It's closer to receiving deposit interest than to issuing a loan.

You aren't setting the interest rate, it's open ended with no fixed term, and the issuer (you) can unilaterally decide the borrower (IBKR) must pay it back at any time you choose.
 
You must log in or register to reply here.
Back
Top