Dáil Éireann Debate, Thursday - 25 October 2012
54. Deputy Pearse Doherty asked the Minister for Finance if he has information and if he will provide a breakdown of the number of persons who claimed tax free lump sums in 2011 in the following categories, under €50,000, €50,000-€75,000, €75,000-€100,000, €100,000-€150,000, €150,000 - €200,000, €200,000 plus. [46951/12]
Amharc ar fhreagraThe following are the current arrangements which apply in relation to the taxation of retirement lump sums paid under Revenue approved pension arrangements. These arrangements apply in both the public and private sectors and were introduced in Budget and Finance Act 2011:
- Retirement lump sum amounts up to €200,000 are paid free of tax. They are also paid free of the Universal Social Charge (USC).
- The portion of a lump sum between €200,001 and €575,000 is taxed on a ring-fenced basis at 20%. (This means that no tax credits or other tax reliefs can be set against this portion of the lump sum.) No USC is chargeable.
- Any amount of a lump sum in excess of €575,000 is taxed under Schedule E and collected under the PAYE system (credits and other tax reliefs are available). In this instance, USC is also chargeable on the excess.
These amounts are lifetime amounts with prior lump sums taken since 7 December 2005 aggregating with later lump sums. As there is no general requirement for data on the number or value of retirement lump sums below the €200,000 limit to be returned to my Department or to the Revenue Commissioners, I am not in a position to provide the figures requested in the question in that regard.
As regards lump sums exceeding €200,000, returns provided to the Revenue Commissioners in respect of lump sum payments between €200,001 and €575,000 indicate that 375 individuals paid tax of €6.6 million for the year 2011. Information is not available to identify the number of individuals, if any, receiving lump sum amounts in excess of €575,000, or the associated tax yield, as such amounts are taxed at the individual’s marginal tax rate (together with USC) as income under the normal PAYE system.
