264A Conditions and declarations relating to special term accounts

Summary

The term “special term accounts” refers to certain deposit accounts that could be opened in the period 1 January 2002 to 15 October 2013.

This section deals with the conditions that applied to “special term accounts” and describes the contents of the declaration which had to be made in order for a deposit to be treated as a special term account.

Details

Conditions applying to “special term accounts”

(1) The following conditions applied to “special term accounts”:

• the account had to be designated as a medium term account or as a long term account;
• it could not be designated in foreign currency;
• it could not be connected with any other account;
• all relevant deposits are subject to the same terms;
• the interest rate could not be fixed for a period greater than 12 months;
• the interest paid or payable could not be linked to or determined by changes in the price/value of shares on a stock exchange, etc.;
• an account could not be opened/held by an individual under the age of 16;
• the account could only be opened and held in the name of the person beneficially entitled to the relevant interest;
• a joint account could be held by not more than 2 individuals;
• an individual could not simultaneously hold more that one account, except in the case of married persons or civil partners who may hold 2 joint accounts;
• the maximum amount of monthly deposit could not exceed €635, but when the account was opened an individual could transfer his/her savings with the same deposit taker to the account, and a single deposit of €7,620 could also be made during the term of the account;
• interest credited to an account is not to be regarded as a deposit for the purposes of the €635 monthly limit but such interest may not be withdrawn unless it is withdrawn within 12 months from the date credited;
• deposits may not be withdrawn from an account, otherwise than on the death of an account holder, within 3 years from the date of deposit, in the case of a medium term account, and 5 years from the date of deposit, in the case of a long term account, but a single withdrawal may be made from an account by an individual who is 60 years or over provided the account was opened by him/her before reaching that age.

Details of declaration required

(2) The declaration must be a declaration in writing to the relevant deposit taker which:

• was made by the individual who holds the account,
• was signed by the declarer,
• was in a form prescribed by the Revenue Commissioners,
• declared that the relevant conditions of subsection (1) are satisfied,
• contained the full name and address of the declarer,
• contained an undertaking that if the relevant conditions of subsection (1) cease to be satisfied the declarer will notify the relevant deposit taker,
• contained any other information required by the Revenue Commissioners.

(3) The provisions of section 263(2) in relation to the retention and examination of declarations applied to declarations under this section.

Section 23 of the Finance Act (No 2) 2013 provided that no new special term share account could be opened on or after 16 October. Therefore, with effect from that date the tax treatment outlined above applies only to the following accounts:

• special medium term share accounts that have not reached the third anniversary of the opening of the account by 15 October 2013,
• special long term share accounts that have not reached the fifth anniversary of the opening of the account by 15 October 2013 and
• special long term share accounts that were originally opened as special medium term share accounts and that have not reached the fifth anniversary of the opening of the account by 15 October 2013.

Relevant Date: Finance Act 2021