Boylan & Dodd Tax Breaks : Regular Savings



A new measure was announced in the Finance Bill 2001 to encourage people to save regularly - the Special Savings Incentive Scheme. The scheme was unchanged after the budget for 2003.

Special Savings Accounts

Basically, relief will be granted as follows:
  1. You may invest up to €254 into a special account with a bank or financial institution.
  2. An account can comprise investments in deposits, shares, government securities, collective funds or life assurance products.
  3. You will be granted a tax credit at 25%. In other words, the government will top up your savings. They will only do this for the first five years of the account.
  4. Thus if you save €254 per month, you will receive a tax credit of 25% @ €254 = €63 per month to your account.
  5. It does not matter what your other tax liabilities are.
  6. The minimum investment is €13 per month during the first year of the account.
  7. After five years, any income or gains arising from the account will be subject to a tax of 23%.
  8. After five years, the capital amount (including the tax credits) can be taken tax free.
  9. If funds are withdrawn within the five year period, the total funds will be subject to the exit tax of 23%.
  10. Every person over 18 can have one account each.
  11. The scheme starts on 1 May 2001.
  12. No new accounts can be opened after 30 April 2002.
A number of changes were introduced in the Finance Bill 2002, as follows:
  1. The gap between the date the last payment was made by the saver and the date of "maturity" of the total savings has been reduced by one month.
  2. SSIA Credit Union "share" accounts giving rise to dividends to be exempted from 20% withholding tax.
  3. Income arising in an SSIA fund after the tax date of maturity of a fund is to be taxed at the 23% rate (i.e. the maturity date is ignored).
The Role of Boylan & Dodd

If you require assistance with obtaining this relief, please contact us. You can eMail us by clicking here.