Tom was working for his employer for 35 years and received a lump sum payment of €200,000 from his employer on retirement. He never received a tax-free termination payment before. He has received a tax-free lump sum of €5,000 from his pension scheme.
Tom’s total basic exemption is as follows:
|Standard Basic Exemption (€10,160 + [€765 x 35])
|Increase in Basic Exemption (€10,000 - €5,000)
Tom can receive up to €41,935 from his employer tax-free.
If the tax-free amount Tom received from his pension scheme was €12,000, the increase in the basic exemption would not be available.