Q&A

Tax relief on overseas college fees

Q

I did a three-month study course in the UK last summer. My fees (€3,000) plus living expenses amounted to roughly €5,000 which my parents funded. I was wondering if they can claim any tax relief on this figure.

Also I am hoping to go back to college in Ireland this September, having already completed a first degree, to begin another. My parents want to support me for the next four years, which shall amount to roughly €50,000 in total. Are entitled to tax relief on these fees?

– Mr N K, e-mail

A

There is relief available on tuition fees. On the plus side, the relief is available for courses undertaken either at home or in another EU state, including Open University. There are certain eligibility criteria for the colleges. A list of approved colleges and courses in the State are available at revenue.ie.

Both undergraduate and post-graduate courses are covered – indeed, in the case of post-grad, certain universities outside the EU will also qualify.

You can claim relief only for tuition fees – not administration, registration or examination fees, and certainly not living costs. Also, any part of the fees covered by a grant, a scholarship or by your employer is not eligible for relief.

Undergraduate courses must take at least two academic years to be eligible. For post-grad, the courses must last at least one year and no more than four.

On that basis, your summer study stint in the UK last year will not qualify. The course you plan to undertake in September should. Relief is granted at the standard rate of income tax – ie 20 per cent. There is also a cap on qualifying fees – €5,000 in 2009 and this year.

Income level age limit for DIRT

Q

Would you be kind enough to let me know what is the income level below which “Over seventies” can qualify for exemption single or jointly?

– Mr A K, e-mail

A

The exemption limit for people over the age of 65 – the level below which they do not have to pay income tax – is currently €20,000 for an individual and €40,000 for a married couple assessed jointly.

Your question arises in relation to a previous query on Deposit Interest retention tax (DIRT). If your income is below the levels stated above, you can fill out a form – Form DE1 – and return it to whichever bank holds your savings. It will then denote your account DIRT-free, meaning no DIRT will be deducted in the first place. The form can be got from the banks or the Revenue.

If you have already paid DIRTt and feel you are entitled to a refund because of your age and income level, you will need to complete a separate document, Form 54, and return it to your tax office. Blank forms are available from the Revenue.

• Writing on An Post savings bonds and certificates, we said last week that the maximum individual holding of each was €120,000–€240,000 for joint holdings. This limit applies to each issue – the current 17th issue of savings certificates and 9th issue of savings bonds has been on the market since August 2007. You can hold similar amounts of previous or subsequent issues

This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com