St Canice's Kilkenny

There are two basic share account options. These are;

REGULAR SHARE ACCOUNTS & SPECIAL SHARE ACCOUNTS

Regular Share Account

With a Regular Share Account, dividend is added gross to the account i.e. without deduction of Deposit Interest Retention Tax (DIRT). Members must declare dividends received to the Revenue Commissioners in their annual income tax return and they are then liable to pay tax on this dividend at their marginal income tax rate. The credit union will not deduct DIRT from any dividends earned.

Special Share Account

With a Special Share Account the credit union will automatically deduct DIRT from any dividend earned and pay it over to the Revenue Commissioners. The DIRT will be at the prevailing rate and members who hold a Special Share Account will have no further tax liability on this dividend and they will not be required to make any declaration to Revenue.

Notes

• Members who pay income tax at a higher rate will pay less tax on their dividends if they have a Special Share Account. They will pay DIRT only and they will not have to declare their dividend to Revenue.
• Members who pay income tax at the lower rate will currently pay more tax on their dividends with a Special Share Account. They will pay the DIRT rate. However, should they opt for a Regular Share Account and declare dividends to Revenue themselves, this dividend will be treated as additional income and in turn taxed at their marginal income tax rate.
• At 1/02/2011 – DIRT 27% & Income Tax Rates 20% & 41%

Medium & Long Term Special Share Accounts

Members that have a Special Share Account can also opt to put some savings into a Medium or Long Term Special Share Account. These accounts are designed to provide a tax efficient savings option for credit union members.

Medium Term Special Share Account – 3 Years

Money invested in a Medium Term Special Share Account must remain in the account for three years. Members can earn an annual dividend on that money up to €480 without having to pay DIRT. Any dividend earned above this threshold (€480) will be taxed at the prevailing DIRT rate and the credit union will deduct the tax and pay it over to the Revenue Commissioners.

Long Term Special Share Account – 5 Years

Money invested in a Long Term Share Account must remain in the account for five years. Members can earn an annual dividend on that money up to €635 without having to pay DIRT. Again, any dividend earned above €635 will be taxed at the prevailing DIRT rate and the credit union will deduct the tax and pay it over to the Revenue Commissioners.

Notes

• Each member can only have one Medium or Long Term Special Share Account.
  
• The minimum lodgement accepted is €1,000. 
  
• Money in these accounts can be used as collateral against loans.
  
• Where dividends are earned in excess of the tax free thresholds, DIRT will be deducted at the prevailing rate.
  
• A list of accounts opened is sent to the Revenue Commissioners every year.
  
• A declaration must be signed to open a Special Term Share Account.