St Canice's Kilkenny

Return of Payments (Banks, Building Societies, Credit Unions and Savings Banks) Regulations 2008

To comply with the Return of Payments (Banks, Building Societies, Credit Unions and Savings Banks) Regulations 2008, financial institutions are obliged to report annually to Revenue certain details in respect of dividend or interest payments to members, as follows;

• All accounts earning a dividend or interest of more than €635 gross in any year will be returned to the Revenue Commissioners with effect from 01 January, 2009. This means that the first dividend/interest payments for which a report was made to Revenue were those earned in respect of the credit union year ended 30 September, 2009.
• Also all new accounts opened after 01 January, 2008 must be reported to the Revenue Commissioners in the first year that any dividend is earned. There is no minimum dividend limit in respect of such new accounts. However, after a new account is first reported to Revenue, the member will not be reported again unless his or her dividend goes above €635.
• In addition, from 01 January, 2009, credit unions must request PPS numbers from members when new accounts are opened.

Some important points to note;

• These regulations do not apply to Loan Interest Rebates.
  
• These regulations apply to all share accounts (regular, special and special term).
  The amounts to be reported to be reported are the gross dividends i.e. before deduction of DIRT (if applicable).
  
• Reporting is on an account basis and not on a member basis, i.e. where a member has more than one account, these do not have to be added together , but are reported separately.
  
• Joint accounts must be reported for each party to the account. For example, €1,000 paid to John and Mary Smith is reported under John Smith and also under Mary Smith.

Deposit Interest Retention Tax (DIRT) Free Accounts For Members Aged Over 65 or Permanently Incapacitated

The Finance Act, 2007 introduced new arrangements that allow some Special Share Account holders (provided they meet certain conditions) to have credit union dividends paid to their savings account without deduction of DIRT.

In order to claim exemption from DIRT, members must complete a self declaration form (DE1) and return it to their credit union.

To qualify for a DIRT free account, members must meet a number of conditions, including:

• Members or their spouse (if appropriate) are aged 65 or over when making the declaration or
  
• Are permanently incapacitated.

Over 65s

In order to claim exemption from DIRT members must complete a Self-Declaration stating that they or their spouse (if appropriate) are age 65 or over when making the Declaration.

They must also declare that they and their spouse’s (if appropriate) total income for the year will be below the annual exemption limit. In this regard, it is worth noting that the annual exemption limit may be increased if they have dependant children.

(Note: Exemption limits change annually in the Budget. The current exemption limits are listed in Revenue’s Information Leaflet IT1 – Tax Credits, Reliefs & Rates. This leaflet can be ordered by phoning LoCall 1890 306 706 available 24 hours a day, 7 days a week, from any Revenue office or on the Revenue’s website www.revenue.ie)

A joint account will only qualify for the DIRT exemption where the qualifying account holders are husband and wife. Also, joint accounts with more than two accounts holders will not qualify.

Permanently Incapacitated

For members that are permanently incapacitated, a Declaration form must also be completed. This form can be obtained from the Revenue Commissioners, who will then contact the credit union to advise if it is in order to pay dividends DIRT free.