Interest & DIRT
Banks, building societies and post offices, offer accounts where you can save a sum of money (a deposit) for which they will pay you an annual rate of interest in return.
The interest you receive is subject to a tax called Deposit Interest Retention Tax (DIRT).
A D.I.R.T. rate of 41% from 1st January 2014 (33% from January 2013 and 30% from the 1st January 2012) is payable on interest earned on a deposit where the interest cannot be calculated annually or more frequently and the interest cannot be determined until it is paid.
D.I.R.T. is a final liability for income tax purposes, i.e. the payment of retention tax at the standard rate by individuals liable to income tax at the higher rate is regarded as satisfying the individual’s full liability to this tax.
However, in certain circumstances, an individual will also be liable to pay PRSI and/or the Health Contribution in respect of the Deposit Interest received.
The Universal Social Charge (USC) does not apply to Deposit Interest that has been subjected to Deposit Interest Retention Tax.
If an individual is aged 65 or over or they are permanently incapacitated, they may be entitled to a refund of DIRT. For more information contact our offices at 05991 29800.