Finance Act, 2002

Amendment of Part 8 (annual payments, charges and interest) of Principal Act.

21.—Part 8 of the Principal Act is amended—

(a) in section 256(1)—

(i) in paragraph (ii) of the definition of “special term account”, by substituting “taker;” for “taker.”, and

(ii) by inserting the following after the definition of “special term account”:

“‘special term share account’ has the same meaning as in section 267A.”,

(b) in section 261A—

(i) by substituting the following for subsections (2) and (3):

“(2) Interest paid in a year of assessment in respect of a relevant deposit held in a medium term account shall—

(a) be relevant interest only to the extent that such interest exceeds €480, and

(b) as respects the first €480 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.

(3) Interest paid in a year of assessment in respect of a relevant deposit held in a long term account shall—

(a) be relevant interest only to the extent that such interest exceeds €635, and

(b) as respects the first €635 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

and

(ii) by substituting the following for subsection (5):

“(5) Where an election is made in accordance with subsection (4), interest paid in a year of assessment which commences on or after the date the election is made shall—

(a) be relevant interest only to the extent that such interest exceeds €635, and

(b) as respects the first €635 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

(c) in section 264A—

(i) in subsection (1), by substituting the following for paragraph (j):

“(j) an individual shall not simultaneously hold whether solely or jointly—

(I) a special term share account, or

(II) subject to paragraph (k), another special term account;”,

and

(ii) in subsection (2)(a), by deleting the words “is payable”,

(d) in section 267A—

(i) in subsection (1), by inserting the following after the definition of “special share account”:

“‘special term account’ has the same meaning as in section 256(1);”,

and

(ii) by inserting the following after subsection (1):

“(2) For the purposes of this Chapter the amount of any dividend credited to a member's account shall be treated as if it were a dividend paid, and references in this Chapter to any dividend paid shall be construed accordingly.”,

(e) in section 267C—

(i) by substituting the following for subsections (1) and (2):

“(1) The value of the dividend paid in a year of assessment on shares held in a medium term share account shall—

(a) be treated as an amount of relevant interest paid in that year of assessment only to the extent that such value exceeds €480, and

(b) as respects the first €480 of such value, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.

(2) The value of the dividend paid in a year of assessment on shares held in a long term share account shall—

(a) be treated as an amount of relevant interest paid in that year of assessment only to the extent that such value exceeds €635, and

(b) as respects the first €635 of such value, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

and

(ii) by substituting the following for subsection (4):

“(4) Where an election is made in accordance with subsection (3), the value of the dividend paid on shares in a year of assessment which commences on or after the date the election is made shall—

(a) be treated as an amount of relevant interest paid in that year of assessment only to the extent that such value exceeds €635, and

(b) as respects the first €635 of such value, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

and

(f) in section 267D—

(i) in subsection (1), by substituting the following for paragraph (j):

“(j) a member shall not simultaneously hold whether solely or jointly—

(I) a special term account, or

(II) subject to paragraph (k), another special term share account;”,

and

(ii) in subsection (2)(a), by deleting the words “is payable”.