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Certain amounts deemed to be income.
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231.—(1) This section applies in relation to a retirement benefits scheme which is approved by the Revenue Commissioners by exercise of the powers conferred on them by section 229 (2), in a case to which section 229 (2) (e) applies.
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(2) Where, under a retirement benefits scheme in relation to which this section applies, any benefit is provided for a director or employee on his retirement, otherwise than by way of non-commutable pension or annuity, and the total value of all benefits so provided under all retirement benefits schemes in relation to which this section applies exceeds the amount which would have satisfied the condition specified in section 229 (1) (h) (ii), the amount of such excess (hereafter in this section referred to as the excess) shall be deemed, for all the purposes of this Act, to be income of the director or employee for the year of assessment in which his retirement takes place and assessable to income tax under Case IV of Schedule D:
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Provided that the director or employee shall, on proof of the relevant facts to the satisfaction of the Revenue Commissioners, be entitled to have the total amount of income tax and sur-tax payable by him for the year of assessment reduced to the total of the two following amounts:
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(i) the amount of income tax and sur-tax which would have been payable by him if this subsection had not been enacted, and
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(ii) income tax and sur-tax on the amount of the excess at rates respectively ascertained in the manner specified in subsection (3).
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(3) There shall be ascertained:
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(a) the amounts of income tax and sur-tax respectively which would have been payable by the director or employee for the year of assessment in which his retirement takes place if his total income for that year had not included any remuneration from the office or employment from which he has retired, but had included a full year's payment of the non-commutable pension or annuity, if any, provided for him on his retirement, and
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(b) the additional amounts of income tax and sur-tax, over and above the amounts ascertained in accordance with paragraph (a), which would have been payable by him if his total income for the year of assessment had, in addition to the income specified in that paragraph, included a full year's payment of a pension for his life (hereafter in this subsection referred to as the notional pension) the value of which, at the date of his retirement, would have been equal to the excess,
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and the rates of income tax and sur-tax respectively for the purposes of paragraph (ii) of the proviso to subsection (2) shall then be ascertained by dividing the additional amounts of income tax and sur-tax respectively computed in accordance with paragraph (b) by the amount of the notional pension.
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(4) (a) Section 434 shall apply to any payment made in respect, or on account, of the excess as if such payment were a payment of interest charged to tax under Schedule D not payable out of profits or gains brought into charge to tax, and tax shall accordingly be deducted by and recoverable from the person by or through whom the payment is made.
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(b) This subsection shall not affect the liability of the director or employee in question to assessment to tax by virtue of this section under Case IV of Schedule D, or the amount on which he may be so assessed to tax, but, for the purposes of collection, credit shall be given to him for the amount deducted and accounted for under this subsection.
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(5) Where the aggregate value of all benefits provided on or in connection with the retirement of a director or employee under all retirement benefits schemes subsisting in connection with the body corporate does not exceed £3,000, this section shall not take effect in relation to such director or employee.
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