Taxes Consolidation Act 1997 section 812

Taxation of income deemed to arise from transfers of right to receive interest from securities

Section 812 provides that where a person sells or transfers the right to receive interest or dividends on securities while retaining ownership of those securities, the interest or dividends are deemed to be income of the owner (or beneficial owner) and are chargeable to tax accordingly.

• Where an owner of securities sells or transfers the right to receive interest (including dividends and annuities) without selling the securities themselves, that interest is deemed to be income of the owner or, where appropriate, the beneficial owner for the year of assessment or accounting period concerned.
• If the interest is of a type that can be paid without deduction of tax and the sale proceeds have not been charged to tax under Schedule C or Chapter 2 of Part 4, the owner or beneficial owner is chargeable under Case IV of Schedule D, with credit for any tax already borne by the interest.
• For corporation tax purposes, the Case IV charge applies to all interest (whether or not tax-deductible at source) but without credit for tax borne, and the remittance basis does not apply.
• The section does not apply where the interest would not have been chargeable to Irish tax had the owner or beneficiary received it directly, or where the sale proceeds are already taken into account in computing the profits of a trade, profession or business.