Ciarán Lynch (Cork South Central, Labour)
Link to this: Individually | In context

Question 142: To ask the Minister for Finance the value of funds held in bearer bonds here; the way such bonds are assessed by the Revenue Commissioners; and if he will make a statement on the matter. [16294/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

There is no data available on the total value of funds held in bearer bonds here. These debt securities can be issued by both public and private institutions.

In general, income arising from or gains on the disposal of bearer bonds is liable to tax in the same manner as income or gains arising on other bonds.

In the case of an Irish resident individual, interest or discount income arising on the bonds would be taxable at the beneficial owner's marginal rate of income tax.

Where the bond is held by a company, the rate of tax applicable depends on whether the income arises in the course of the company's trade. If the income is trading income, then the appropriate tax rate is 12.5% whereas if the income is considered to be investment rather than trading income, the rate of corporation tax applicable will be 25%.

Interest income arising on securities issued under the authority of the Minister for Finance or issued by certain public bodies is exempt from tax where the securities are beneficially owned by persons who are not ordinarily resident in the State.

Withholding tax does not apply to interest payments on securities issued under the authority of the Minister for Finance or issued by certain public bodies.

As regards other (non-Government) securities, in general withholding tax at the standard rate must be deducted by a company from payments of interest to persons whose usual place of abode is in the State.

Bearer bonds are chargeable assets for capital gains tax (CGT) purposes unless they are securities issued under the authority of the Minister for Finance or issued by certain public bodies.