Finance Act, 1992

Amendment of Chapter IV (interest payments by certain deposit takers) of Part I of Finance Act, 1986.

22.—(1) Chapter IV of Part I of the Finance Act, 1986 , is hereby amended—

(a) in subsection (1) of section 31—

(i) by the substitution of the following definition for the definition of “appropriate tax”:

“‘appropriate tax’, in relation to a payment of relevant interest, means a sum representing income tax on the amount of that payment—

(a) in the case of a relevant deposit or relevant deposits held in a special savings account, at the rate of 10 per cent., and

(b) in the case of any other relevant deposit, at the standard rate in force at the time of payment;”,

(ii) by the insertion of the following definitions after the definition of “interest”:

“‘operative date’ means the date on which sections 37 A and 37B (inserted by the Finance Act, 1992) come into operation by virtue of an order made by the Minister for Finance under section 22 of that Act;

‘pension scheme’ means an exempt approved scheme within the meaning of section 16 of the Finance Act, 1972 , or a retirement annuity contract or a trust scheme to which section 235 or section 235A (inserted by the Finance Act, 1974 ) of the Income Tax Act, 1967 , applies;”,

(iii) in the definition of “relevant deposit”—

(I) by the substitution, in paragraph (a), of the following subparagraph for subparagraph (iii):

“(iii) Icarom p.l.c.,”,

and

(II) by the insertion of the following paragraph after paragraph (e):

“(ee) (i) which is made on or after the operative date by, and the interest on which is beneficially owned by, a company within the charge to corporation tax or a pension scheme, and

(ii) in respect of which a declaration of the kind mentioned in section 37B (inserted by the Finance Act, 1992) has been made to the relevant deposit taker;”, and

(iv) by the insertion of the following definition after the definition of “return”:

“‘special savings account’ means an account, opened on or after the operative date, in which a relevant deposit or relevant deposits made by an individual is or are held and in respect of which—

(a) the conditions in subsection (1) of section 37A (inserted by the Finance Act, 1992) are satisfied, and

(b) a declaration of the kind mentioned in subsection

(2) of that section has been made to the relevant deposit taker.”,

(b) in subsection (1) of section 35—

(i) by the deletion, in paragraph (c), of “, subject to paragraph (d),”, and

(ii) by the deletion of paragraphs (d) and (e),

and the said paragraph (c), as so amended, is set out in the Table to this section, and

(c) by the insertion of the following sections after section 37:

Conditions and declarations relating to special saving accounts.

37A.—(1) The conditions referred to in paragraph (a) of the definition of ‘special savings account’ (inserted by the Finance Act, 1992) in section 31 (1) are as follows—

(a) the account shall be designated by the relevant deposit taker as a special savings account;

(b) no withdrawal of money shall be made from the account within the period of three months commencing with the date on which it is opened;

(c) the terms under which the account is opened shall require the individual to give a minimum notice of 30 days to the relevant deposit taker in relation to the withdrawal of any money therefrom;

(d) there shall not be any agreement, arrangement or understanding in existence, whether express or implied, which influences or determines, or could influence or determine, the rate (other than an unspecified and variable rate) of interest which is paid or payable, in respect of the relevant deposit or relevant deposits held in the account, in, or in respect of, any period which is more than 24 months;

(e) the relevant deposit or the aggregate of the relevant deposits held in the account, including any relevant interest added thereto, shall not, at any time, exceed £50,000;

(f) the account shall not be opened by or held in the name of an individual who is not of full age;

(g) the account shall be opened byand held in the name of the individual who is beneficially entitled to the relevant interest payable in respect of the relevant deposit or relevant deposits held therein;

(h) except in the case of an account opened and held jointly by and only by a couple married to each other, the account shall not be a joint account;

(i) except in the case of an account opened and held jointly by and only by a couple married to each other, either the same or any other relevant deposit taker shall not simultaneously hold another special savings account opened and held by an individual;

(j) in the case of an account opened and held jointly by and only by a couple married to each other, they shall not simultaneously hold (either with the same or any other relevant deposit taker) any other special savings account either individually or jointly other than one other such account opened and held jointly by them.

(2) The declaration referred to in paragraph (b) of the definition of ‘special savings account’ in section 31 (1) is a declaration in writing to a relevant deposit taker which—

(a) is made by the individual (here-after in this section referred to as ‘the declarer’) to whom any interest payable in respect of the relevant deposit or relevant deposits held in the account in respect of which the declaration is made is payable by the relevant deposit taker, and is signed by the declarer,

(b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(c) declares that at the time when the declaration is made the conditions referred to in paragraphs (f) to (j) of subsection (1) are satisfied in relation to the account in respect of which the declaration is made,

(d) contains the full name and address of the individual beneficially entitled to the interest payable in respect of the relevant deposit or relevant deposits held in the account in respect of which the declaration is made,

(e) contains an undertaking by the declarer that if the conditions referred to in paragraphs (f) to (j) of subsection (1) cease to be satisfied in respect of the account in respect of which the declaration is made, the declarer will notify the relevant deposit taker accordingly, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(3) Subsection (2) of section 37 shall have effect as respects declarations of the kind mentioned in this section as it has effect as respects declarations of the kind mentioned in that section.

(4) Section 35 shall apply and have effect in relation to any relevant interest paid in respect of any relevant deposit held in a special savings account—

(a) as if the following paragraph were substituted for paragraph (c) of subsection (1):

‘(c) except for the purposes of a claim to repayment under section 39 (2), the amount of any payment of relevant interest (being relevant interest paid in respect of any relevant deposit held in a special savings account) shall not be reckoned in computing total income for the purposes of the Income Tax Acts,’,

and

(b) as if paragraphs (d) and (e) of subsection (1) were deleted.

(5) An account shall cease to be a special savings account if any of the conditions mentioned in subsection (1) cease to be satisfied and the provisions of subsection (4) shall not apply to any relevant interest in respect of any relevant deposit held in the account which is paid on or after the date on which the account ceases to be a special savings account.

Declarations by companies and pension schemes.

37B.—(1) The declaration referred to in paragraph (ee) (inserted by the Finance Act, 1992) of the definition ‘relevant deposit’ in section 31 (1) is a declaration in writing to the relevant deposit taker which—

(a) is made by a person (hereafter in this section referred to as ‘the declarer’) to whom any interest on the deposit in respect of which the declaration is made is payable by the relevant deposit taker, and is signed by the declarer,

(b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(c) declares that at the time the declaration is made the interest on the deposit in respect of which the declaration is made is beneficially owned by a company within the charge to corporation tax or a pension scheme, as the case may be,

(d) contains as respects the person beneficially entitled to the interest—

(i) that person's name and address, and

(ii) that person's tax reference number,

(e) contains a certificate by the appropriate person that, to the best of his knowledge and belief, the declaration made in accordance with paragraph (c) and the information furnished in accordance with paragraph (d) are true and correct, and

(f) contains such information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(2) Subsection (2) of section 37 shall have effect as respects declarations of the kind mentioned in this section as it has effect as respects declarations of the kind mentioned in that section.

(3) Where a return is required to be made by a relevant deposit taker under section 175 of the Income Tax Act, 1967 , in respect of interest on a deposit in respect of which a declaration has been made in accordance with the provisions of this section, that return shall include the tax reference number contained in the said declaration of the person beneficially entitled to the interest.

(4) In this section—

‘appropriate person’ means—

(a) in relation to a company, the person or persons appointed as auditor of the company under section 160 of the Companies Act, 1963 , or under the law of the state in which the company is incorporated and which corresponds to that section, and

(b) in relation to a pension scheme—

(i) in the case of an exempt approved scheme (within the meaning of section 16 of the Finance Act, 1972 ), the administrator (within the meaning of section 13 of that Act) of the scheme,

(ii) in the case of a retirement annuity contract to which section 235 or section 235A (inserted by the Finance Act, 1974 ) of the Income Tax Act, 1967 , applies, the person lawfully carrying on in the State the business of granting annuities on human life with whom the contract is made, and

(iii) in the case of a trust scheme to which the said section 235 or the said section 235A applies, the trustees of the trust scheme;

‘tax reference number’, in relation to a person, has the same meaning as is assigned to it in section 22 of the Finance Act, 1983 , in relation to a specified person within the meaning of that section.”.

(2) (a) Subparagraph (iii) (I) of paragraph (a) of subsection (1) shall be deemed to have come into operation on the 1st day of August, 1990.

(b) Paragraph (b) of subsection (1) shall apply and have effect as respects the year 1993-94 and subsequent years of assessment.

(c) Paragraph (c) of subsection (1) shall come into operation on such day as the Minister for Finance may by order appoint.

TABLE

(c) the amount of any payment of relevant interest shall be regarded as income chargeable to tax under Case IV of Schedule D and under no other Case or Schedule and shall be taken into account in computing the total income of the person entitled to that amount, but no assessment to income tax shall be made in respect of relevant interest on the person receiving or entitled to the payment of the relevant interest.