Written answers
Wednesday, 1 July 2009
Department of Finance
Tax Code
11:00 pm
Michael Ring (Mayo, Fine Gael)
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Question 117: To ask the Minister for Finance if there are proposals regarding the taxing of a payment (details supplied). [26709/09]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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On the issue of the tax treatment of retirement gratuities for the Public Service, the position is that under statutory pension schemes and pension schemes approved by the Revenue Commissioners there is no liability to income tax in respect of retirement gratuities or lump sums paid to members of such schemes on retirement. Provided individuals are members of such schemes and the lump sum payments comply with the relevant legislation and Revenue rules in this area, there is no liability to income tax on the retirement lump sums.
In this regard, it should be noted that the tax arrangements for retirement lump sums apply in respect of pension schemes in both the public and private sectors.
As I mentioned in my Budget Speech on 7 April last, the Commission on Taxation is examining various aspects of pension tax treatment, including the treatment of retirement lump sum payments, and I expect to be dealing with the Commission's recommendations in the 2010 Budget in December.
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