Banks to rat on Savings account holders

mike65 · 23-05-2008 1:49pm #1

Look out if you have about 20k in one or more savings accounts - the revenue will have you on thier radar later this year.

They say they are after peeps with 100k+ in savings but if anyone with 20k will have details taken then we know where they are going I think.

RTE story (slightly half arsed report so far)

The Revenue Commissioners have announced a new voluntary disclosure initiative giving the holders of large scale deposit accounts until September 15 this year to make a voluntary disclosure about any tax due on the money they have invested in those accounts.

Under the new initiative all banks, building societies and post offices will have to automatically report to Revenue details of accounts, names and addresses whenever a person earns more than €635 in interest on their deposit. (note this is earned from roughly €20,000 at current rates)

In addition, all financial institutions will have to report account details as well as individual tax reference numbers for all new deposit accounts opened from the 1 January, 2009, regardless how much interest was earned.
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This is to prevent savers splitting their account to avoid disclosure to the Revenue Commissioners

Seems to me the main impact of this move will be to encourage hoarding of cash outside the system.

Mike.

daigo75 · 23-05-2008 4:12pm

Sorry for the question, but I'm not sure I understand where the problem is. If I have, let's say, 25K in AIB Savings account, I will earn interests and they will be subject to 20% of DIRT. From AIB website:
"We will deduct Deposit Interest Rentention Tax (DIRT) at the standard rate (at present 20%, but this may change), from all interest earned, and we will pay this directly to the Revenue Commissioners."

So tax is already paid... What's the problem?

mike65 · 23-05-2008 4:23pm

I think they are using this as a trawl for monies that somehow got put into a savings account without any other taxes being paid first, ie cash in hand/under the counter on a large scale.

Mike.

unclebill98 · 23-05-2008 4:29pm

There interest in it is because they wanna know where it came from.

daigo75 · 23-05-2008 4:33pm

Ah, I think I understand now. Then, if all the money in the accounts are coming from regular salaries and/or other regular bank accounts, I think there should be no problem.

Ogham · 23-05-2008 4:59pm

€635 interest would be earned on about 13k before Dirt -(At 5% interest) so there might be a lot of accounts getting looked into by the revenue.

shockwave · 23-05-2008 5:42pm

What about the credit unions, would they have to do the same?

Ogham · 23-05-2008 5:54pm

shockwave wrote: »

What about the credit unions, would they have to do the same?

The regulations apply to banks, buildings societies, credit unions and the Post Office Savings Bank where accounts or investments pay more than €635 interest in a year.

Sherifu · 23-05-2008 5:56pm

I think i'm safe.

Ogham · 23-05-2008 6:06pm

Slight change : I just checked and in relation to credit union dividends, they only have to start telling revenue about dividends paid in respect of periods ending before the start of 2009. Banks and the rest will have to go back to 2005.
Seems a bit unfair ? MAybe the credit unions haven't got the info or the technology to do it?

stepbar · 23-05-2008 6:34pm

Our Chinese friends may want to watch out. It's only a matter of time before they catch up with a lot of them.

Davy · 23-05-2008 6:53pm

stepbar wrote: »

Our Chinese friends may want to watch out. It's only a matter of time before they catch up with a lot of them.

care to expand

Tabnabs · 23-05-2008 7:02pm

Offshore bank accounts FTW

juuge · 25-05-2008 10:32pm

A Dublin importer recently said that he has sold a ****-load of 'home safes' in the past number of months, is this a coincidence or what?

memeandmark · 27-05-2008 9:00am

not sure if i understand this...say i received over 100k in compensation i am already paying DIRT on this...Will i now have to pay another tax..or will they question these type of payments to accounts?? thanks in advance

mike65 · 27-05-2008 11:16am

The compo would need to be accountable if you can prove its honest money you will be fine, this the way things are going. Its up to the account holder to prove they are not a tax-dodging criminal basicly.

Mike.

Noobsaibot21 · 07-07-2008 1:41am

Hi all,

I desperately need advice on the below. Any help or input would be greatly appreciated.

My girlfriend's dad is a self employed person for many years. He has over €100,000 in savings with the EBS and has been paying DIRT tax on this income. However, he never specifically "declared" it as he was advised on numerous occasions by both his accountant and the EBS that he was paying the correct tax and everything was "above board". So in other words, he was under the impression that the EBS savings were already declared due to him having paid DIRT tax, so to speak.

However, with the Voluntary Disclosure Initiative, his taxman seems to think that the tax company will take his house and everything for not declaring his income (even though he has been paying DIRT and has always paid his taxes). The G/F's dad is devastated with this obviously. Would this be true?

His taxman said he would likely owe the revenue €1,000,000 but then said he got the rate 'reduced' to €550,000. I dont know where he got these figures from as the revenue haven't mentioned any specific mitigated fees or anything.

Is his taxman just being an eejit? Or is this 16 hours a day for 40 years, hard working man in trouble for basically nothing?

Please let me know if you have any comment or advice on this situation.

Many thanks,
Noobsaibot21

GerardKeating · 07-07-2008 1:59am

Noobsaibot21 wrote: »

Hi all,

I desperately need advice on the below. Any help or input would be greatly appreciated.

My girlfriend's dad is a self employed person for many years. He has over €100,000 in savings with the EBS and has been paying DIRT tax on this income. However, he never specifically "declared" it as he was advised on numerous occasions by both his accountant and the EBS that he was paying the correct tax and everything was "above board". So in other words, he was under the impression that the EBS savings were already declared due to him having paid DIRT tax, so to speak.

However, with the Voluntary Disclosure Initiative, his taxman seems to think that the tax company will take his house and everything for not declaring his income (even though he has been paying DIRT and has always paid his taxes). The G/F's dad is devastated with this obviously. Would this be true?

His taxman said he would likely owe the revenue €1,000,000 but then said he got the rate 'reduced' to €550,000. I dont know where he got these figures from as the revenue haven't mentioned any specific mitigated fees or anything.

Is his taxman just being an eejit? Or is this 16 hours a day for 40 years, hard working man in trouble for basically nothing?

Please let me know if you have any comment or advice on this situation.

Many thanks,
Noobsaibot21

There is two seperate TAX issues here.

The 100K savings earns interst and tax is due on this, and this should be OK, EBS are right, the DIRT is payed.

BUT where did the 100K come from, this might be the proceeding of income which was never declared for TAX, then your gf's dad is in big trouble,

If the 100K savings is savings from income for which tax has been paid, then no problem, but you he might have to show where it came from...

Noobsaibot21 · 07-07-2008 2:18am

Hi and cheers for the quick reply. This is money he has saved over the years from his income. Not too sure if it was just cash from his sales that he put straight in or what - I will need to find that out.

Cheers,
Noobsaibot21

Just got a text from the gf. Basically, and i quote:

"his problem is that in 1993, there was a lump sum in his account from an annual rollover of interest. The problem is the ebs inhouse database only goes back to '93 and doesn't show the roll over."

That confuses me more. I will ask him tomorrow so i can advise you accordingly.

Thanks,
Noobsaibot21

The Rooster · 07-07-2008 9:04am

There is a lot of information on www.revenue.ie. Click on the link to "Undisclosed Large Sums in Irish Banks and Building Societies".

One of the questions in the FAQ is:

Q: The capital I invested in the deposit account resulted from income/capital gain that has already been taxed. Am I required to make a submission to Revenue?
A: No - there is no need for you to take any further action.

The DIRT is largely irrelevant in this initiative. What counts is where did he get the 100k. If this came out of taxed income, then he has nothing to worry about. If it came out of untaxed income then he has some serious decisions to make, and the first step is to get advice from a good accountant.

meridian603 · 20-01-2009 6:09pm

If one had over €100k divided between various bank & credit union accounts are they likely to be investigated.
a property with no mortgage also??
and no declaration of income......:(

Sarn · 20-01-2009 8:34pm

As long as you dont earn more than €635 on any account you should be ok....for now.

IsThatSo? · 21-01-2009 11:17am

meridian603 wrote: »

If one had over €100k divided between various bank & credit union accounts are they likely to be investigated.
a property with no mortgage also??
and no declaration of income......:(

If your PPSN info was given when you opened the accounts then they can link them all to you.

dizzybridie · 01-02-2009 3:43pm

Lord if it is from undeclared earnings from the business then he could def be in trouble. Tell him he's better to get it sorted now than wait. Charges for late disclosure are really severe and actually go up for every year you didn't disclose it. Check out rates on www.revenue.ie and get a good accountant / solicitor

Klingon Hamlet · 04-02-2009 1:41am

mike65 wrote: »

The compo would need to be accountable if you can prove its honest money you will be fine, this the way things are going. Its up to the account holder to prove they are not a tax-dodging criminal basicly.

Mike.

Suppose they can say they got their money from betting on horses.

Worked for Ahern.

May he RIP real soon.

Banks to rat on Savings account holders

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