Tel: 053 - 9488700 Fax: 053 - 9420938 Email: info@goreycreditunion.com
Special Term Share Accounts can help reduce your DIRT liability by enabling you to earn a certain amount of dividend tax-free.
There are two types of this new account - namely a Medium Term Share Account and a Long Term Share Account.
Medium Term Share Account (3 years)
• A maximum tax-free dividend of €480 per annum can be earned. Any dividend in excess of this is taxed at the DIRT rate of 25%.
• The funds have to be left in the account for 3 years to qualify for the tax benefits otherwise there will be penalties for early withdrawal i.e. all tax benefits received since the account was opened will be clawed back.
• A single lodgement up to a maximum of €24,000 is allowed on opening the account. An additional lodgement of €5,000 is allowed during the term of the account subject to the overall maximum amount above.
Long Term Share Account (5 years)
• A maximum tax-free dividend of €635 per annum can be earned. Any dividend in excess of this is taxed at the DIRT rate of 25%.
• The funds have to be left in the account for 5 years to qualify for the tax benefits; otherwise a penalty as above will apply.
• A single lodgement up to a maximum of €31,750 is allowed on opening the account. An additional lodgement of €5,000 is allowed during the term of the account subject to the overall maximum amount above.
See below for a full listing of Terms & Conditions,and Frequently Asked Questions & Answers, Application Forms are avilable by contacting the office.
Questions & Answers
Can I withdraw the funds from my Special Term Account?
Yes however, if you withdraw funds that have not been in your account for the required minimum period, all tax benefits previously given in respect of your Special Term Share Account will be clawed back. This provision applies retrospectively back to the opening of your account. (Partial withdrawals are not allowed)
What happens when I reach my 60th Birthday?
If you reach the age of 60 during the term of your Special Term Share Account, you can make a once-off withdrawal at that time without penalty. There is no upper limit on the amount of this withdrawal.
What happens to the account on my death?
If you should die during the term of your Special Term Share Account, the account is deemed to have matured and there is no penalty on withdrawal of funds or closure of the account.
Can I withdraw my Dividends?
Dividends earned will be credited to the Special Term Account and can be withdrawn within 12 months of being credited without penalty.
I have opted for a Special Share Account where DIRT is deducted from my dividend. Can I open a Special Term Share Account also?
Yes, as a DIRT payer, a Medium or a Long Term Share Account will reduce your liability to DIRT, if you are in a position to put some or all of your money away for three or five years.
Can I fund a Special Term Share Account from my main shares?
Yes, you can transfer a lump sum from your main shares into a Special Term Share Account, subject to the maximum amounts of €24,000 for a Medium Term Account and €31,750 for a Long Term Account. A further once off lump sum will be allowed during the term subject to the overall maximum above.
Can funds in my Special Term Share Account be used as security for a loan?
Yes, money invested in a three or a five year account can be used as security for a credit union loan.
Can I change from a Medium Term to a Long Term Account?
If you have a Medium Term Account, you can elect to change it to a Long Term Account at anytime. However, the following provisions apply.
• The request to transfer from a Medium Term to a Long Term must be made in writing.
• Amounts lodged when the account was a Medium Term Account must then be left in the account for a minimum of five years before they can be withdrawn without penalty.
• The increased tax-free allowance does not take effect until the tax year following the year in which you elect to change.
NOTE: *You cannot change your account from a Long Term Account to a Medium Term Account*.
What are the responsibilities of Gorey Credit Union Ltd.?
The credit union is obliged to inform Revenue if it has reasonable grounds to suspect that the terms under which the Special Term Share Account was commenced are not being complied with.
The credit union must collect and pay over all taxes due to the Revenue and make an annual report to the Revenue stating:
• The full name and address of the holder of each account opened during the previous year.
• Whether such account is a medium term or long term account
• The date the Special Term Share Account was opened.
Gorey Credit Union Ltd. must make all declarations available for inspection by Revenue.
Special Term Share Accounts
Terms and Conditions
(Please read the following terms and conditions carefully and retain a copy for future reference.)
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Definitions “Medium Term Share Account” means an account opened by a member with GCU on terms under which the member has agreed that any lodgement to the account is to be held in the account for a period of not less than 3 years. “Long Term Share Account” means an account opened by a member with GCU on terms under which the member has agreed that any lodgement to the account is to be held in the account for a period of not less than 5 years. “Special Term Account” means: (a) A Medium Term Share account, or (b) A Long Term Share account. “Year of Assessment” means Tax Year, currently 1st. January to 31st. December. 2) The member is required to maintain either a Regular Share Account or Special Share Account for their regular saving contributions |
9) In addition to the lodgement referred to at 8 over, a member may make one additional lodgement totalling not more than €5,000 during the period in which the account is open subject to balance on the account not exceeding the maximum limits referred to at 8 above. 11) Credits in respect of dividend and or interest rebate may be withdrawn from the account without penalty providing the withdrawal is made within 12 months of the payments being credited. 12) A member over the age of 60 may make one withdrawal from the account, without penalty, providing that the account was opened before the member reached the age of 60. 14) Dividend paid, up to €635, in a year ofassessment, on shares held in a Long TermShare Account, are exempt from DIRT – any excess over this figure is subject to DIRT. 15) If a member withdraws shares from a Special Term Account that have not been held in the account for the required period, the account will cease to be a Special Term Account, and all dividends paid since the account was opened will be subject to DIRT. If “past” dividends have already been withdrawn from the account, GCU will deduct from the shares held, the amount required to discharge such liability. Any accrued dividend will also be subject to DIRT. |
