Sunday times - Question of Money - August 21

Posted by Jill Kerby on August 21 2011 @ 09:00


By all accounts its easy to set up a euro exit strategy


MS writes from Dublin:  For some time you have highlighted  the possible danger to holders of Irish Euro accounts if Ireland exits the single currency in the future. Please advise how an Irish citizen can open a euro account in another 'euro' country.


Irish people who own holiday homes or investment property abroad – in Spain, Portugal, France, Italy  – are able to open euro accounts with no difficulty (aside from the usual bureaucracy and the fulfilling on anti-money laundering requirements.)  There is no EU restriction on EU citizens opening bank accounts in a member state, but it is left to individual banks (and they sometimes leave it to individual branches) to decide whether they want to accept your business.

One of the easiest ways to open an ‘off-shore’ euro account is to do so by travelling to Northern Ireland. Ulster Bank and National Irish Bank both have sister banks in the north – Ulster Bank and Northern Bank respectively and they will both open accounts for their own Republic of Ireland account holders as well as non-customers.  You need to bring all the required anti-money laundering identification with you and NIB, which is owned by the Danish Danske Bank (which is outside the eurozone altogether) recommends that you get a letter of introduction from your own bank to bring with you; because it is a cashless bank, it will impose a 1% charge on the value of cash deposits.

Finally, If you have a sizeable sum – at least €200,000 - that you want to deposit in another EU country – you can use the services of the fee-based, independent financial advisor Vincent Digby of Impartial.ie.

It can arrange for the setting up of DeutscheBank euro deposit accounts in Germany that pay 1.9% interest without the client having to travel. The minimum cost for this service is €500, he says. 



Cheque it out


AB writes from Dublin: Can you explain why the banks in Ireland take five days to clear a cheque?  They bleat on about preventing fraud, which they should well be able to do without taking five days. This is this is simply customer unfriendly. Is it true that in Sweden it just takes one day to clear a cheque?


I called my own bank, and asked them how cheque clearance works and this is what they told me:

A friend gives you a cheque over the weekend. You lodge it into your account in your own bank, on Monday, Day 1.  On Tuesday, Day 2, the cheque arrives at your friends’ bank. By Tuesday your bank will start paying interest on that cheque if it has been deposited in an interest bearing account. On the Wednesday and Thursday, Days 3 and 4, your friend’s bank has the right to withdraw the cheque he wrote if they are not happy to verify it.  If they do verify the cheque, on Friday, Day 5, you can start spending it. All this assumes there are no glitches and that the weekend doesn’t intervene.

By the way, on top of clearing delays, cheques cost 80 cent each,including a 50cent government stamp duty.



Ditch the dirt



PW writes from Waterford:  My mother died leaving my two children, aged 11 and 14, €10,000 euro each. I was told there was no inheritance tax to pay.

We decided to use your Best Buys list to find a good fixed rate account for the money and decided to go with the PTSB account where the interest in paid upfront for one year. However, I then found out that 27% DIRT is payable on this account, even though neither of the children have any income of their own. Is this correct?  Also, is it correct that no DIRT would be payable in a credit union account? (I know Post Office savings are tax free.)


It is indeed correct that children pay DIRT on interest earned even if it is their only earnings.  Only pensioners with earnings below the income tax threshold, disabled people or their trustees, charities and non-residents are exempt from DIRT. Certain longer term credit union accounts, called special share accounts, that only earn up to €480 or €635 of dividend interest are DIRT free.  Over those amounts and the interest is subject to DIRT and will be deducted by the credit union.  If they open an ordinary regular share account the DIRT on any dividends must be declared to the Revenue in an annual tax return.  Post Office three year bonds and five year certificates pay all returns tax-free.




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