It should be appreciated that tax free retirement lump sums taken on or after 7 December 2005 when the original limit was introduced will count towards using up the new tax free amount. In other words, if an individual has already taken tax free retirement lump sums of €200,000 or more since 7 December 2005, any further retirement lump sum paid to the individual on or after 1 January 2011 will be taxable. There is no question of those individuals somehow getting an additional tax free amount. These earlier lump sums will also count towards determining how much of a lump sum paid on or after 1 January 2011 is to be charged at the standard or marginal rate as appropriate.

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