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Dáil Éireann debate -
Thursday, 5 Jul 2001

Vol. 540 No. 3

Written Answers. - Tax Liability.

Noel Ahern

Question:

40 Mr. N. Ahern asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will clarify the situation in relation to the taxation and liability to tax of lump sums paid out to former employees of a company (details supplied); if payments were made tax free; if amounts were tax free in the hands of recipients; if part was tax free; if the payments were treated for tax purposes in the same way as payments to former staff of another company; and if she will make a statement on the matter. [20742/01]

The Hospitals' Trust (1940) Limited (Payments to Former Employees) Act, 2000, came into operation on 8 July 2000. Since that time payments of £20,000 each have been made in 147 cases – 131 to surviving former employees and 16 in personal representative cases. Of the 131 surviving former employees paid, income tax was paid in 12 cases, payment ranging from £624 to £1,344. The liability to pay income tax was dependent on the tax status of the individual.

In the case of some personal representative cases and their beneficiaries, because they had already exceeded the inheritance tax threshold, they were required to pay some inheritance tax. No probate tax was paid in personal representative cases. With regard to the other company referred to, the legislation was passed in 1994. The former employees of that company had income tax and PRSI deductions made from the extra statutory payments they received under that legislation.

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