Amendment to the NID Guidelines
The Guidelines in relation to the Notional Interest Deduction rules have been revised and a new paragraph has been added to the rules. The new paragraph (xii) entitled: Attribution of the Deemed Interest Income on Alternative Bases reads as follows:
In terms of the proviso to sub-rule (3) of Rule 5 of the Rules, in the specific circumstances outlined below, the following attribution of deemed interest income shall apply:
Where a shareholder is the only shareholder of a company that holds no more than 0.2% of the nominal value of the risk capital of such company and, in accordance with the Memorandum and Articles of Association, such holding is devoid of any rights to vote, to receive any dividends from the company and to particpate in the profits of the company, no deemed interest income shall be attributable to such shareholder, and the share of the deemed interest income that would have been attributable to such shareholder were it not for this paragraph (xii) shall be attributable to the other shareholders of the company in proportion to the nominal value of the risk capital of the company pertaining to each shareholder.
In order to apply the above, a request in writing must be made to the Commissioner for Revenue, and the second paragraph of (iv) of these Guidelines shall apply.
The NID Guidelines can be downloaded from the website of the Office of the Commissioner for Revenue.