A majority of members of the working group on the taxation of credit unions has backed a recommendation that the return from credit union shares should be exempt from taxation up to a dividend value of £375.

At current rates of interest, this would mean that credit union savings up to £7,500 would be taxfree.

Seven of the nine-member group supported a compromise deal which would also see credit unions remain exempt from corporation tax while they would not be required to report interest or dividends on credit union savings.

The recommendations also include the application of deposit interest retention tax (DIRT) on all credit union deposits. DIRT would also be applied to the return on all shares except where a member's return is £750 or less and in such cases the first £375 only would be exempt.

The recommendations were backed by seven members of the working group, including the four representatives of the Irish League of Credit Unions, the representative of the Department of Enterprise, Trade and Employment, the Registrar of Friendly Societies and the independent chairman Mr Terence Larkin.

However, the representatives of the Department of Finance and of the Revenue Commissioners did not support the recommendation. The report has now gone to the Minister for Finance for consideration.