480A Relief on retirement for certain income of certain sportspersons

Summary

This section makes provision for relief from income tax in respect of certain earnings of sportspersons listed in Schedule 23A. The sportspersons concerned are: athlete, badminton player, boxer, cricketer, cyclist, footballer, golfer, jockey, motor racing driver, rugby player, squash player, swimmer and tennis player.

The earnings to which the relief applies are earnings deriving directly from actual participation in the sport concerned such as prize money, performance fees etc, but not other earnings such as sponsorship fees, advertisement income or income from endorsements etc. The relief takes the form of a deduction from earnings equal to 40 per cent of those earnings for any 10 years of assessment in the relevant period consisting of the year of retirement and the 14 years of assessment immediately preceding that year. The sportsperson must be resident in the State, an EU state or an EEA state at the time of retirement.

The relief will be given by way of repayment of tax and is to be claimed in the year in which the sportsperson ceases permanently to be engaged in that sport. Provision is made to withdraw the relief by way of a Case IV assessment for the years in respect of which the relief was originally given if the person subsequently recommences to be engaged in that sport, though this does not prevent a subsequent claim for the relief if and when the sportsperson finally does retire at a later time.

Details

Definitions

(1) “basis period”, is defined as the period in respect of which profits or gains of the sportsperson are charged for a year of assessment.

Other definitions are self-explanatory.

(6) The meaning of “wholly and exclusively” is refined to include —

• wages, salaries and fees etc. received as a direct consequence of playing the game, in the cases of an employed person, and
• all prize money, performance fees etc. received directly from playing the game in the case of a self employed person,

but does not include monies received from sponsorship, advertisements or endorsements etc.

Application of section

(2) Subject to section 960H (offset between taxes), the section applies where a sportsperson, specified in Schedule 23A (a relevant individual) satisfies the Revenue Commissioners that he/she has ceased permanently in a year of assessment to be engaged in that occupation or to carry on that profession (specified occupation and specified profession, respectively) where the person was resident in the State for that year of assessment.

(3) A claim to avail of the deduction must be made within 4 years of the end of the year in which the sportsperson retires

(3A) Subsection (4) is to apply notwithstanding the general time limit for making a claim for a repayment of tax contained in section 865. Any excess tax paid may be repaid on foot of a valid claim within the meaning of section 865(1)(b). (The meaning of a valid claim is dealt with in section 865).

The relief

(5) The amount of the deduction is set at 40% of the gross receipts for each year, before deducting expenses, which arose wholly and exclusively from engaging in the sport.

(7) The claim is to be submitted in the return of income for the year in which the person ceases to play the game. If the person is not required to submit a return for that year, the relief can be claimed by submitting a claim for relief.

(8) The relief will be given by way of tax repayment in all cases, no interest will be due to the taxpayer in respect of the payment and the relief cannot create a loss for the purposes of Chapter 1 of Part 12 (loss relief).

Interaction with Retirement Annual Relief

(9) The giving of the relief will not affect the persons income for the years in respect of which the relief is given for the purposes of sections 787 and 787B (level of allowable contributions for the purposes of retirement annuity contracts, occupational pension schemes and personal retirement savings accounts).

Withdrawal of relief

(10) Any relief given may be withdrawn if the person recommences to engage in the sport, by making an assessment under Case IV of Schedule D for the years in respect of which the relief was originally given. These assessments may be made at any time.

Relevant Date: Finance Act 2021