Pearse Doherty (Donegal, Sinn Fein)
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180. To ask the Minister for Finance the total number of individuals charged excess tax under the standard fund threshold in each of the years from 2016 to 2022. [51744/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I am advised by Revenue that if an individual’s pension fund is higher than the Standard Fund Threshold (SFT), which is currently €2 million, the excess over the threshold (the “chargeable excess”) is subject to an upfront, ring-fenced income tax charge (known as “chargeable excess tax”) at 40%, in the year of assessment in which the “benefit crystallisation event” (BCE) giving rise to the chargeable excess occurs. No reliefs, allowances or deductions may be set against the chargeable excess when computing the amount of tax due. In certain circumstances, however, standard rate lump sum tax – that is, tax due on the portion of a retirement lump sum in excess of €200,000 – may be offset against chargeable excess tax.

Part 30, Chapter 2C of the Taxes Consolidation Act 1997 (TCA) outlines the limits on tax-relieved pension funds and the taxation of amounts over that limit. The SFT is defined in section 787O TCA; the chargeable excess is detailed in section 787Q TCA; chargeable excess tax is set out in section 787R TCA; and credit for lump sum tax against chargeable excess tax is provided for in section 787RA TCA.

Revenue does not collect data on the number of pensions that exceed the SFT. However, the number of pensions which paid chargeable excess tax between 2017 and 2022 is set out in the table below. This does not include pensions which exceeded the SFT in those years but where the chargeable excess tax due was reduced to nil by being offset against tax on a retirement lump sum.