SSIA and further investing

PDelux

Is anyone going to invest their SSIA money (or part of)?

Word is the government are planning something which will be released around the time of maturity. Maybe something like a pension scheme where some money can be withdrawn after a certain period, as apposed to none until retirement.

Trampas

Mine will go straight into my rabodirect account until i have thought of something to do with it.

Better off increasing by 3.2% than nothing until i decide what i will do with it

CCOVICH

Came across this site today which looks interesting.

democrates

Is it just me or does the ssia4 form requirement to avoid 23% tax the most rediculous piece of red tape ever conceived? I can't fathom why the scheme was designed with this requirement.

concobhar

Trampas wrote:

Mine will go straight into my rabodirect account until i have thought of something to do with it.

Better off increasing by 3.2% than nothing until i decide what i will do with it

3.2% minus capital gains tax? Isn't that right? Not too sure. 3.2% minus a quarter of that would bring it down below the inflation rate, which means you money is worth less in real terms until you have thought of something to do with it. I'm in the same boat myself.

garred

Thinking of buying land in Turkey and with the SSIA build a place to rent. Incidentally did anyone hear on the radio that the variable SSIA's (or whatever they are called) are doing much better that the fixed.

PDelux

Brian Cowen was just on the 'News at 1' couple of mins ago. He confirmed there would be no SSIA scheme again but would not comment on any other schemes e.g. pension related.

Omnipresence

The government are quite pissed off with the SSIA thing overall... they liked the fact that it got people saving.. but it was WAAY too generous ... I have a SSIA and I tend to agree... 25% wow... you can be sure no-one ever sees a scheme like this (value wise) ever again...

So i dont think they are gonna rush to create another compounding incentive on top of this like tax breaks for SSIA pension etc....

I just hope the weed out the people who have taken unfair advantage...

I know people who are abroad availing of this scheme and also some people filling up 2/3 accounts (old aunties and uncles names etc)

I know they have a thing where you sign (in blood or something ;-) that you lived in ireland for the full time..

-A

PDelux

Well the Government might like it in the fact that they will get most of the money back in taxes.

The argument for some similar scheme related to pensions is that too many people are not interested in saving for their pension and if a carrot is dangled it would encourage people into the pensions.

Manhog

CCOVICH, thanks for the link - I'm the guy who put the SSIAwatch.com website up.

democrates wrote:

Is it just me or does the ssia4 form requirement to avoid 23% tax the most rediculous piece of red tape ever conceived? I can't fathom why the scheme was designed with this requirement.

If they didn't have the SSIA4, surely anybody could open and close an SSIA account. It seen as just an exit formality, but it is a signed declaration to the Revenue Commissioners.

aloleary wrote:

I know people who are abroad availing of this scheme and also some people filling up 2/3 accounts (old aunties and uncles names etc)

I'd say they are in for a rude awakening in the form of prosecution or 23% exit tax on the lot.

I've collated an SSIA FAQ here which explains a fair amount.

D'Peoples Voice

democrates wrote:

Is it just me or does the ssia4 form requirement to avoid 23% tax the most rediculous piece of red tape ever conceived? I can't fathom why the scheme was designed with this requirement.

This practice is quite common in the Life Assurance business. At proposal stage it would be too cumbersome to check out everyone's personal details, and what's the point, they may never claim. On the other hand, if you wait until they claim, you have fewer people to assess.
Likewise with the Gov scheme, how can someone say in advance if they will be a resident in the country for the next 5 years. If people had to notify the Reve comm when they were to leave the country for a year or two to go to Aussie, it would be an admin nightmare. The solution is to validate those remaining in the scheme at the end.

aloleary wrote:

I just hope the weed out the people who have taken unfair advantage...

I know people who are abroad availing of this scheme and also some people filling up 2/3 accounts (old aunties and uncles names etc)

That is why the gov specifically said that any payment made to an SSIA has to come from the bank account of SSIA holder. That's not to say someone could not have got their uncle/aunt to set up a "holding" bank account on their behalf, but the fact that the SSIA cannot be assigned would pose a great risk to the real beneficiary should the unlce/aunt die before maturity.

Anyway this practice is commonplace with investment property for years, people fronting their 18 year old children as the first time buyer of a house, just to get the first time buyers grant and allow the child to reside there as their principal residence to avoid capital gains tax because of it being a principal private residence for the home owner. Do the banks know this is going on? I'll let you answer that:D Maybe they genuinely think 18 year students can afford 2 bed appartments in Rathmines by working in a bar at weekends! Wake up tax evasion is our forte like money making scams through emails is to Nigeria. But that's just my opinion!

opus

Trampas wrote:

Mine will go straight into my rabodirect account until i have thought of something to do with it.

Better off increasing by 3.2% than nothing until i decide what i will do with it

Northen Rock for that extra 0.05% over rabo

democrates

SSIA4 makes sense now, thanks for the insights.

Does anyone know what happens if a person passes away before the end of the scheme?

Manhog

democrates wrote:

SSIA4 makes sense now, thanks for the insights.

Does anyone know what happens if a person passes away before the end of the scheme?

I clarified this with the Revenue Commissioners. They state that the account must be closed if the SSIA holder dies, but the contributions (including government 25% top up) made up until the point of death will not be taxed - the account will be treated as if it has just matured. Further details available here.

ionapaul

Question: once the SSIA4 has been signed and accepted, will any other tax liabilities be encurred should the beneficiary gift the proceeds to another party (over and above the standard gift tax)?

CCOVICH

I presume that you are aware that any gain on your investment/deposit is subject to tax at 20%?

Other than that, I don't think that there are any tax implications (other than possible CAT as you have mentioned) if you gift the proceeds to someone else.

Note: I don't know if the Revenue would take the (an unfavourable) view that the SSIA was in fact for the benefit of someone other than the account holder (from the word go) if a gift was made the day the SSIA in question is encashed.

ionapaul

Great, that is helpful. A friend plans to transfer the proceeds of their SSIA to a family member (there will not be any gift tax incurred) later this year and seeing this discussion made me curious on the logistics.

democrates

Manhog wrote:

I clarified this with the Revenue Commissioners. They state that the account must be closed if the SSIA holder dies, but the contributions (including government 25% top up) made up until the point of death will not be taxed - the account will be treated as if it has just matured. Further details available here.

Thanks manhog.

Selik

aloleary wrote:

I know they have a thing where you sign (in blood or something ;-) that you lived in ireland for the full time..

Hmmm... I'm in Australia right now and I've been travelling since April last year. I'll be back at the start of April this year and I remember checking with my bank about this and they assured me that even though I'll have been away travelling for a year - I'm still counted as being ordinarily resident in Ireland (which I am in fairness) for tax purposes etc incl the SSIA situation.

I think what they mean is that you can't be living and working in another country full-time for a reasonable extended period and be contributing to an SSIA at the same time.

TheBigLebowski

opus wrote:

Northen Rock for that extra 0.05% over rabo

Bank of Scotland (Ireland) for a healthier 3.75%

democrates

TheBigLebowski wrote:

Bank of Scotland (Ireland) for a healthier 3.75%

Is this 3.75% the monthly saver a/c?
It's capped at 50k, you can't open it with more than 10k, and you must save into it monthly.
Fine follow-on to ssia, lob 10k in, 10k into northern rock, and pipe from nrock to rbos monthly.
But let's see if northern rock live up to their promise of at least matching anyone else in the market...

D'Peoples Voice

Giles wrote:

they assured me that even though I'll have been away travelling for a year - I'm still counted as being ordinarily resident in Ireland (which I am in fairness) for tax purposes etc incl the SSIA situation.

I think what they mean is that you can't be living and working in another country full-time for a reasonable extended period and be contributing to an SSIA at the same time.

You must be either resident or ordinarily resident in the Republic of Ireland throughout the period from the beginning of your account to the period on which the declaration of maturity is completed.

Ordinarily resident in Ireland

You are considered to be ordinarily resident in the Republic of Ireland for a year of assessment if you have been resident in the Republic of Ireland for the three previous tax years. An ordinarily resident person does not stop being ordinarily resident for a tax year unless he or she has not been resident in the Republic of Ireland for the three previous tax years.
http://oasis.gov.ie/personal_finance/government_savings_scheme.html