Taxes Consolidation Act 1997 section 46

Exemption of premiums on investment bonds

Section 46 exempts from tax any gain arising on the redemption of Government Investment Bonds, unless the bondholder is trading in securities.

• Investment Bonds are securities issued by the Minister for Finance under the Central Fund (Permanent Provisions) Act, 1965.
• Where the redemption price exceeds the original issue price, the difference (the premium) is exempt from tax.
• The exemption does not apply where the premium forms part of the profits of a trade — for example, in the hands of a bond dealer.
• The exemption applies only to the premium on redemption; it does not extend to any other income or gains from the bonds.