267D Conditions and declarations relating to special term share accounts

Summary

This section outlines the conditions that applied in order that an account could be considered to be a special term share account. It also contains details of the declaration which had to be made in relation to such an account.

Details

Conditions in relation to special term share accounts

(1) The conditions in relation to a special term share account were as follows:

• (a) the account had to be opened and designated by the credit union as a medium term share account or as a long term share account.
• (b) it could not be designated in foreign currency.
• (c) it could not be connected with any other account.
• (d) all shares in the account must be subject to the same terms.
• (e) the rate of dividend must not be fixed for a period greater than 12 months.
• (f) dividends paid or payable must not be linked to or determined by changes in the price/value of shares on a stock exchange etc.
• (g) the account could not be opened/held by a member under the age of 16.
• (h) the account had to be opened and held in the name of the member beneficially entitled to the dividends.
• (i) a joint account may be held by not more than 2 individual members.
• (j) & (k) a member could not simultaneously hold a special term account (i.e. a special 3 or 5 year deposit account) or another special term share account, except in the case of married persons who may hold 2 joint accounts.
• (l), (m) & (n) the maximum amount of monthly subscription for shares must not exceed €635, but when the account was opened a member could transfer his/her savings with the same credit union to the account, and shares costing up to €7,620 may also be added once during the term of the account.
• (o) dividends or rebate of loan interest credited to an account is not to be regarded as a subscription for shares for the purposes of the €635 monthly limit but such amounts may not be withdrawn unless they are withdrawn within 12 months from the date credited.
• (p) shares may not be withdrawn from an account, otherwise than on the death of an account holder, within 3 years from the date of subscription in the case of a medium term share account, and 5 years from the date of subscription in the case of a long term share account.
• (q) a member who is over the age of 60 may make a single withdrawal from an account within the 3 / 5 year limits above without breaching the conditions of the account provided the account was opened by him/her before reaching the age of 60.
• (r) a transfer of shares by a credit union to reduce a loan balance of a member will not be treated as a withdrawal where the shares were pledged as security, the default is for 6 months or more and the credit union has followed standard procedures to recover the loan.

Declarations in relation to special term share accounts

(2) The declaration in relation to a special term share account had to be a declaration in writing to the credit union which:

• was made by the member who holds the account,
• was signed by the declarer,
• was in a form prescribed by the Revenue Commissioners,
• declared that relevant conditions (those in paragraphs (g), (h), (j) and (k) of subsection (1)) in relation to the account are satisfied,
• contained the full name and address of the declarer,
• contained an undertaking that if the relevant conditions of subsection (1) cease to be satisfied the declarer will notify the credit union, and
• contained any other information required by the Revenue Commissioners.

(3) The provisions of section 263(2), in relation to the retention and examination of declarations, apply in relation to declarations under this section.

Relevant Date: Finance Act 2019