Should my mum declare her bank accounts in the North?
Q&A: Dominic Coyle answers your personal finance questions
Revenue has warned it will pursue taxpayers over undeclared offshore income
Q At the height of the financial crisis, when the euro seemed in peril and there was talk of returning to the punt, my mother opened two current accounts in two different banks north of the Border. This was a short-lived transfer of funds from her Irish bank as the markets seemed to stabilise after a period and the interest rates on UK deposit accounts also turned out to be derisory – the funds were thus transferred back to the Irish bank.
One current account with Halifax was opened in August 2011 and closed in July 2012. No interest was received during this time.
The second current account – with Ulster Bank – was opened in August 2011 and closed in February this year, having a very small balance for most of this period (essentially to keep the account open) and again no interest was received at any time.
My understanding is that, given no interest arose, there is no need to make a disclosure to the Revenue by the upcoming May deadline?
Mr DD, Tipperary
A. Your understanding is quite correct. The looming May deadline, after which Revenue has warned it will pursue taxpayers over undeclared offshore income and/or assets with the assistance of new technology and cross-border agreements, is not an issue for your mother.
She was far from alone back in those volatile days following the financial crash in looking to find a safe haven for her savings. The euro did look vulnerable and there was even, as you mention it, serious discussion about returning to the punt with all the chaos that would have meant for the economy as a whole and for individuals and their savings.
The two key elements in her case are, first, that the money she moved into the two Northern Ireland accounts came from funds that were already properly taxed and declared to Revenue here where relevant. As no tax was owing on this money before it was moved north of the Border, the fact that it is an account in the UK, or elsewhere come to that, is irrelevant.
The second issue is whether this legitimate cash was used to generate income outside the State that might itself be liable to tax here as your mother was still resident in the State. In her case, you say, no interest ever accrued on either account. No interest means no income, so there is nothing that she needs to declare to Revenue.
Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to firstname.lastname@example.org. This column is a reader service and is not intended to replace professional advice.