Lump sum payments

Increased exemption

You may be entitled to an increase of €10,000 on the basic exemption if:

• you have not received an amount in excess of the basic exemption in the previous ten years
• and
• you are not a member of an occupational pension scheme
• or
• you are a member of an occupational pension scheme, but give up your right to receive a tax-free lump sum from that scheme.

You may be due to receive a tax-free lump sum from your pension scheme. If so, the lump sum will be deducted from the additional €10,000 unless you waive your right to receive it. If the tax-free lump sum payment is not due yet, then the current value of it will be deducted from the €10,000.

If the tax-free lump sum from your pension scheme is more than €10,000, you will not qualify for the increased exemption. If it is less than €10,000, you will qualify for the increased exemption minus the lump sum amount.

You may have agreed with your pension provider that you will never receive a lump sum payment. You must inform your employer of this agreement in order to receive the increased exemption.

The increased exemption may only be granted once in a ten-year period. You do not need Revenue approval before availing of the increase in the basic exemption.

Next: Standard Capital Superannuation Benefit (SCSB)