Taxes Consolidation Act 1997 section 261B

Taxation of specified interest

Section 261B ensures that deposit interest received gross by qualifying individuals (those aged 65 or over, or permanently incapacitated, with income below certain limits) is taxed only at the standard rate and is not subject to withholding tax.

• "Specified interest" is deposit interest paid gross (without DIRT) to individuals who have made a qualifying declaration under section 256, being persons aged 65 or over, or permanently incapacitated, whose income falls below certain limits.
• To qualify, the interest must not have been previously counted in calculations that would widen the individual's exemption limit or standard rate band.
• Where a person's taxable income includes specified interest, that portion of income is charged to tax at the standard rate only — it cannot be pushed into a higher rate band.
• Withholding tax on interest payments does not apply to specified interest, since the interest is already being paid gross of DIRT.