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Charge to tax: commutation of entire pension in special circumstances.
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22.—(1) Where—
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(a) a scheme which is or has at any time been an approved scheme, or
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(b) a statutory scheme established under a public statute,
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contains a rule allowing, in special circumstances, a payment in commutation of an employee's entire pension, and any pension is commuted, whether wholly or not, under the rule, tax shall be charged on the amount by which the sum receivable exceeds—
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(i) the largest sum which would have been receivable in commutation of any part of the pension if the scheme had contained a rule providing that the aggregate value of the relevant benefits payable to an employee on or after retirement, excluding any pension which was not commutable, should not exceed three-eightieths of his final remuneration for each year of service up to a maximum of 40, or
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(ii) the largest sum which would have been receivable in commutation of any part of the pension under any rule of the scheme authorising the commutation of part (but not the whole) of the pension, or which would have been so receivable but for the said circumstances,
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whichever gives the lesser amount chargeable to tax.
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(2) Where any amount is chargeable to tax under this section the administrator of the scheme shall be charged to income tax under Case IV of Schedule D on that amount, and subsections (2), (3) and (4) of section 21 shall apply as they apply to tax chargeable under that section.
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(3) This section shall not apply where the employee's employment was carried on outside the State.
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(4) In applying subparagraph (i) or (ii) of subsection (1)—
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(a) the same considerations shall be taken into account, including the provisions of any other relevant scheme, as would have been taken into account by the Commissioners in applying section 15, and
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(b) where the scheme has ceased to be an approved scheme, account shall only be taken of the rules of the scheme at the date of the cesser.
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(5) Subsection (1) (b) shall not apply to any payment made before the 6th day of April, 1973.
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