Revenue Note for Guidance

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Revenue Note for Guidance

CHAPTER 2

Government and other public securities: interest payable without deduction of tax

Overview

Chapter 2 of Part 3 provides that interest on certain securities may be paid without the need to deduct tax. The interest payable on the securities, however, remains chargeable to tax under Case III of Schedule D in the hands of the recipient unless otherwise specifically exempted.

36 Government securities

Summary

This section ensures that loans issued under the authority of the Minister for Finance can be issued subject to the condition that any interest is paid without deduction of tax. Any interest so paid remains chargeable to tax under Case III of Schedule D in the hands of the recipient unless otherwise specifically exempted. The section also provides for the necessary information to be furnished to the Revenue Commissioners so as to enable assessments to be made on the persons entitled to the interest.

Details

(1) Securities issued under the authority of the Minister for Finance may on that Minister’s direction be issued subject to the condition that the interest on the securities is paid without deduction of tax.

(2) The interest on securities so issued remains chargeable to tax. The tax, however, is charged under Case III of Schedule D. Where funds under the control of any court or public department are invested in such securities, the person in whose name the securities are invested is chargeable in respect of the interest. (The Case III of Schedule D charge is removed in certain cases – see Chapter 3 of this Part, in particular section 43.)

(3) The persons who —

  • pay such interest,
  • receive such interest on behalf of others, or
  • act as intermediaries in the purchase of such securities,

are, on request by the Revenue Commissioners, required to furnish the Commissioners with information as to —

  • the name and address of the persons to whom the interest has been paid,
  • the name and address of the persons on whose behalf such interest has been received,
  • the amount of the interest paid or received,
  • the name and address of the persons on whose behalf such securities were purchased, and
  • the amount of such securities.

Relevant Date: Finance Act 2019