Financial Terms Glossary
The most important financial terms - with simple and concise explanations.
Exemption order
An exemption order allows investors to apply the saver’s tax allowance directly at their bank or asset manager. With an exemption order in place, the institution does not withhold final withholding tax on eligible investment income such as interest, dividends or capital gains-up to the available allowance.
Investors with accounts or portfolios at multiple institutions can divide their exemption orders across providers based on investment amounts and expected returns. Although it is also possible to reclaim withheld tax via the income tax return, this delays reinvestment and therefore potential returns.
Unused allowance amounts cannot be carried over to the next year. Exemption orders can be adjusted at any time during the year.