(1) Subject to subsections (3) and (4), where tax has been deducted from an interest payment in a relevant territory under provisions applicable in such territory in accordance with the Directive or the arrangements and -

(a) the interest payment is, or but for an exemption or relief from tax would be, taken into account in computing the total income of an individual for the tax year in which the tax was deducted for the purposes of income tax, and

(b) the individual is resident in the State for that tax year,

then -

(i) the individual may claim a credit for the tax deducted from the payment against any income tax chargeable on that individual for that year and, in determining the amount of tax payable on the individual's total income for that year, credit shall be given for the tax deducted from the interest payment and the amount of the credit shall be the amount of tax deducted from the interest payment, and

(ii) where -