Taxes Consolidation Act 1997 section 267AA

Taxation of dividends on regular share accounts

Section 267AA provides that dividends paid or credited by credit unions on regular share accounts are to be treated as deposit interest and subject to deposit interest retention tax (DIRT).

• The value of shares held in a credit union regular share account is treated as a relevant deposit for DIRT purposes.
• Any dividend paid on those shares is treated as relevant interest paid on that deposit.
• The DIRT provisions in Chapter 4 of Part 8 apply to such dividends in the same way as they apply to interest paid by any other relevant deposit taker.
• The effect is that credit unions must deduct DIRT from dividends paid or credited to regular share accounts.