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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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Double Taxation Relief Manual: Guidance by country: Ireland: Bank or building society interest

Where interest is paid to a bank controlled in Ireland, relief is due to the payer under ICTA88/S 353 (1), subject to the normal limitations (see RE330 onwards).

It used to be the case (see below) that where the interest was paid to a bank carrying on a bona fide banking business in Ireland the payer might be requested not to deduct United Kingdom tax.

The practice of allowing some United Kingdom residents to pay interest gross to financial institutions in Ireland without requiring the institutions concerned to make claims to relief from United Kingdom tax under the double taxation agreement has been discontinued.

In the case of loans made on or after 1 May 1997, United Kingdom residents who pay interest to persons in Ireland must deduct and account for Income Tax under ICTA88/S349 (2), unless they have been authorised to do otherwise by Centre for Non-Residents, Nottingham. Residents of Ireland who receive interest from the United Kingdom may claim relief from United Kingdom tax in respect of the interest under the agreement in the usual way (DT1800).

Where gross payment of interest was made before 1 May 1997 without a claim under the agreement being made and accepted by Centre for Non-Residents, Nottingham, this may continue provided that

  • both the payer and the beneficial owner of the interest remain unchanged
  • the period of the loan is not extended


  • the terms of the loan are not amended in a way which will increase the interest payments.

Cases where it is not clear whether those conditions are met should be referred to the Centre for Non-Residents, Nottingham.