Finance Act 2013

Ex gratia payments: miscellaneous amendments.

14.— (1) The Principal Act is amended—

(a) in section 201 by substituting the following for subsection (2):

“(2) (a) Income tax shall not be charged by virtue of section 123 in respect of the following payments:

(i) an amount not exceeding €200,000 of any payment made—

(I) in connection with the termination of the holding of an office or employment by the death of the holder, or

(II) on account of injury to or disability of the holder of an office or employment;

(ii) any sum chargeable to tax under section 127;

(iii) a benefit provided pursuant to any retirement benefits scheme where, under section 777, the employee (within the meaning of that section) was chargeable to tax in respect of sums paid, or treated as paid, with a view to the provision of the benefit;

(iv) a benefit paid in pursuance of any scheme or fund described in section 778(1).

(b) Where paragraph (a)(i) applies to any payment, or any part of a payment—

(i) the exemptions from income tax provided by virtue of any other provision of this section (other than subsection (1A)) and Schedule 3, or

(ii) any deduction in computing the charge to income tax under paragraph 6 of Schedule 3,

shall not apply to the excess of any such payment.

(c) (i) Notwithstanding subparagraph (i) of paragraph (a) the amount of €200,000 referred to in that subparagraph shall be reduced by an amount equal to the aggregate amount of all payments, exempted from income tax by virtue of that subparagraph, which were paid before or at the same time as the making of the payment to which that subparagraph refers.

(ii) Where two or more payments to which subparagraph (i) of paragraph (a) applies are made to or in respect of the same person in respect of the same office or employment, or in respect of different offices or employments, for the purposes of that subparagraph this subparagraph shall apply as if those payments were a single payment of the aggregate amount of all such payments, and the provisions of subparagraph (i) of paragraph (a) shall apply to that single payment accordingly.”,

(b) in section 201(2A) by inserting “, or any part of a payment,” after “Where a payment”,

(c) in section 201(2A)(d) by inserting “, or part of the payment,” after “the payment”,

(d) in section 201 by inserting the following after subsection (4):

“(4A) Subsection (4) ceases to have effect for payments made on or after the date of the passing of this Act.”,

(e) in Schedule 3 by inserting the following in Part 2 after paragraph 9:

“9A. Paragraph 9 ceases to have effect for payments made on or after the date of the passing of this Act.”,

and

(f) in Schedule 3 by inserting the following in Part 3 after paragraph 12:

“13. (a) Notwithstanding section 201, paragraph 10 shall cease to apply to any payment of €200,000 or more which is made on or after 1 January 2013 and which is chargeable to income tax under section 123.

(b) Paragraphs 11 and 12 shall apply for the purposes of this paragraph.”.

(2) Paragraphs (a), (b) and (c) of subsection (1) shall apply as respects payments made on or after the date of the passing of this Act.