80 Payments relating to retirement, etc.

Summary

This section exempts from capital acquisitions tax payments by way of retirement benefit, redundancy payments or pension paid by an employer to an employee although, in certain circumstances, excessive payments may be taxed.

The section also provides that benefits taken by persons other than the employee himself/herself, arising under a superannuation fund or scheme, are deemed to be taken from the employee, as disponer.

Details

(1) “superannuation scheme” includes any arrangement in connection with employment for the provision of a benefit or in connection with the retirement or death of an employee;

“employment” includes employment as a director of a body corporate (e.g. a company) and related words are construed accordingly.

(2) Exemption is granted to bona fide retirement benefits, redundancy payments and pensions. This exemption is, however, subject to the provisions of subsection (3).

(3) The Revenue Commissioners can treat excessive “golden handshakes”, etc. as partly taxable where the employer and employee are related or the employee “controls” the private company which is the employer (see note on section 27 regarding “control”). If the payment is made under an approved scheme, it will not be taxable.

(4) A person who is aggrieved by a decision of the Revenue Commissioners not to grant the exemption has the right to appeal to the Appeal Commissioners, with a right of further appeal to the Courts.

(5) Annuities or lump sums arising in favour of persons other than the employee under a superannuation fund or scheme will be treated as coming, not from the employer, but from the employee.

Relevant Date: Finance Act 2015