I propose to take Questions Nos. 197 to 200, inclusive, together.
Retirement relief for certain sportspersons was introduced in Finance Act 2002. It provides for relief to be given for any tax year by way of a deduction equal to 40% of the sportsperson’s gross earnings, before expenses, from direct participation in their sport. The relief is given in the tax year in which the sportsperson permanently retires provided he or she is tax resident in the State for that year. The relief can be claimed for up to any 10 years in which the sportsperson was resident in the State between the tax year 1990/91 and the tax year in which he or she retires. They do not have to be consecutive years. A claim results in a sportsperson’s tax liability for the years in question being recalculated, based on the 40% deduction and relief is given by way of a refund of tax paid.
The relief was introduced for sportspersons when they permanently retire to acknowledge what they sacrificed in terms of career development and family commitments in order to train and compete at national and international level. It recognised that the majority of professional sportspersons in the State were not wealthy, and tended to have a very short earnings career that could often be cut shorter by injury. It provides recognition of the particular challenges and difficulties they have in earning their income, the contribution that they make to the image of Ireland at home and abroad, and the enjoyment and interest for the general public that they generate by their participation and success.
The relief is given when a sportsperson ceases to be permanently engaged in their sport and is withdrawn where a person recommences the sport on a professional level (although it can be maintained if the sportsperson continues to participate at amateur level). Withdrawal is by means of an assessment for the total amount of the relief under Case IV of Schedule D in the year of assessment in which the relief was given. There is no minimum amount that a sportsperson can earn per annum post retirement before facing a claw back of the relief and the reason for the first retirement is not a consideration in granting the relief in the first instance, nor in clawing it back if the individual returns to the sport. The relief is given on the basis that the individual has permanently retired.
Where an assessment is raised, any person who has difficulty in paying the amount due can contact the Office of the Collector-General in relation to payment options. When the sportsperson subsequently permanently retires he or she can again avail of the relief in that year and in respect of any ten of the years from 1990/91 in which he or she had earnings arising from participation in the sport.