Taxes Consolidation Act 1997 Schedule 2

Repayment of income tax

Schedule 2 provides for the repayment of income tax where tax on coupon proceeds has been accounted for twice — once on encashment and again by deduction from the underlying dividends.

• Where a banker or dealer in coupons has accounted for income tax on the proceeds of sale, realisation, or purchase price of a coupon under the encashment provisions, a double-tax situation may arise.
• If Revenue is satisfied that income tax has also been deducted from the dividends payable on those same coupons under another provision of the Schedule, the second charge duplicates the first.
• In such cases, Revenue must repay the income tax that has been over-deducted, so that the taxpayer is not taxed twice on the same income.
• The repayment is mandatory once Revenue is satisfied that both charges have in fact been applied to the same coupon income.