257 Deduction of tax from relevant interestFA86 s32
(1) Where a relevant deposit taker makes a payment of relevant interest –
(a) the relevant deposit taker shall deduct out of the amount of the payment the appropriate tax in relation to the payment,
(b) the person to whom such payment is made shall allow such deduction on the receipt of the residue of the payment, and
(c) the relevant deposit taker shall be acquitted and discharged of so much money as is represented by the deduction as if that amount of money had actually been paid to the person.
(2) A relevant deposit taker shall treat every deposit made with it as a relevant deposit unless satisfied that such a deposit is not a relevant deposit; but, where a relevant deposit taker has satisfied itself that a deposit is not a relevant deposit, it shall be entitled to continue to so treat the deposit until such time as it is in possession of information which can reasonably be taken to indicate that the deposit is or may be a relevant deposit.
(3) Any payment of relevant interest which is within subsection (1) shall be treated as not being within section 246.
Deduction of tax from Interest payments by certain deposit takers – eBrief No. 60/18
DIRT: Where a parent gives money to a child to open a deposit account and enters into an oral agreement that the child is to pay over to the parent the deposit interest arising on the deposit, who is beneficially entitled to the deposit interest? The parent is beneficially entitled to the deposit interest.
DIRT: Is a nil deposit a relevant deposit for the purposes of TCA97 s257? No.
Corresponding UK Tax Provision
Formerly Sections 480A – 480B, Income and Corporation Taxes Act 1988. Now re-enacted at various places in the Income Tax Act 2007. Refer to the Destination Table of that Act for details.
Sections referred to in text
section 246 [Interest payments by companies and to non-residents]
258 Returns and collection of appropriate tax
260 Provisions supplemental to sections 258 and 259
261A Taxation of interest on special term accounts.
267AA Taxation of dividends on regular share accounts
267C Taxation of dividends on special term share accounts
267I Exemptions from tax and withholding tax
463 Widowed parent tax credit
477C Help to Buy
519C Interest, etc. under certified contractual savings schemes
739J Investment limited partnerships
838 Special portfolio investment accounts
848A Donations to approved bodies
904A Power of inspection: returns and collection of appropriate tax
1078 Revenue offences