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  4. Pensions (Amendment) Act, 2002

Pensions (Amendment) Act, 2002

Amendment of Taxes Consolidation Act, 1997.

4.—(1) The Taxes Consolidation Act, 1997 , is amended—

(a) by the substitution of the following for subsection (5) of section 118:

“(5) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision for a director or employee, or for the director's or employee's spouse, children or dependants, of any pension, annuity, lump sum, gratuity or other like benefit to be given on the death or retirement of the director or employee, other than an expense incurred by way of contribution by the body corporate to a PRSA (within the meaning of Chapter 2A of Part 30).”,

(b) in Part 26—

(i) by the insertion in section 706(3) of the following paragraph after paragraph (c):

“(d) any contract with a PRSA provider (within the meaning of Chapter 2A of Part 30) being a contract which was entered into for the purposes only of the PRSA concerned;”,

and

(ii) in paragraph (b) of subsection (2) (inserted by the Finance Act, 2001 ) of section 730D—

(I) by the deletion in subparagraph (ii) of “or”,

(II) by the substitution in subparagraph (iii) of “207(1)(b), or” for “207(1)(b),”, and

(III) by the insertion of the following after subparagraph (iii):

“(iv) a PRSA provider (within the meaning of Chapter 2A of Part 30) where the policy is held by the PRSA provider in the course of the business of PRSA provider,”,

(iii) in subsection (3) (inserted by the Finance Act, 2001 ) of section 730E:

(I) in paragraph (e)—

(A) by the deletion in subparagraph (ii) of “or, as the case may be,”,

(B) by the insertion in subparagraph (iii) after “section 207(1)(b),” of “or, as the case may be,”, and

(C) by the insertion of the following subparagraph after subparagraph (iii):

“(iv) a PRSA provider (within the meaning of Chapter 2A of Part 30),”, and

(II) by the substitution of the following paragraph for paragraph (f):

“(f) contains an undertaking that should the policy holder cease to be a person referred to in subparagraph (i), (ii), (iii), or as the case may be, (iv) of paragraph (e), the assurance company will be advised accordingly, and”,

(c) in subsection (6) of section 739D (inserted by the Finance Act, 2000 )—

(i) by the substitution in subparagraph (g) of “Schedule 2B,” for “Schedule 2B, or”,

(ii) by the substitution in subparagraph (h) of “Schedule 2B, or,” for “Schedule 2B,”, and

(iii) by the insertion of the following after subparagraph (h):

“(i) is a person who is entitled to exemption from income tax and capital gains tax by virtue of section 7871 (as inserted by section 4 of the Pensions (Amendment) Act, 2002) and the units held are assets of a PRSA (within the meaning of Chapter 2A of Part 30) and the PRSA administrator (within the meaning of that Chapter 2A) has made a declaration to the investment undertaking in accordance with paragraph 9A of Schedule 2B,”,

(d) in Part 30—

(i) by the insertion in section 770(1) of the following after the definition of “proprietary director”:

“‘Personal Retirement Savings Account’ or ‘PRSA’ has the same meaning as in Chapter 2A of this Part;”,

(ii) by the insertion in section 772 of the following after subsection (3C):

“(3D) A retirement benefits scheme shall not cease to be an approved scheme because of any provision in the rules of the scheme whereby, either or both—

(a) a member's entitlements under the scheme, other than an amount referred to in paragraph (b), may, either on the member's changing employment or on the scheme being wound up, be transferred to one or more than one PRSA to which that member is the contributor if the following conditions are satisfied, that is to say—

(i) benefits have not become payable to the member under the scheme, and

(ii) the period or the aggregate of the periods for which the individual has been a member of the scheme or of any other scheme related to that individual's employment with, or with any person connected with, the employer immediately before the said transfer is 15 years or less,

(b) an amount equal to the accumulated value of a member's contributions to the scheme, which consist of additional voluntary contributions made by the member, may be transferred to one or more than one PRSA to which that member is the contributor.”,

(iii) by the insertion in section 780 of the following after subsection (2):

“(2A) This section shall not apply to the extent that any repayment of contributions is transferred by the administrator of the scheme to the administrator of a PRSA, by way of contribution to a PRSA to which the employee is the contributor.”,

(iv) by the insertion in section 784 of the following after subsection (2B) (inserted by the Finance Act, 2000 ):

“(2C) Notwithstanding anything contained in this Part, a retirement annuity contract shall not cease to be an approved contract because of any provision in law, whether or not contained in the contract, whereby the parties to the contract may cancel the contract and effect a transfer of assets into one or more than one PRSA of which the individual who is a party to that approved contract is the contributor.”,

and

(v) by the insertion of the following after Chapter 2—

“Chapter 2A

Personal Retirement Savings Accounts

Interpretation and supplemental.

787A.—(1) In this Chapter, unless the context otherwise requires—

‘additional voluntary PRSA contributions’ means contributions made to a PRSA by an employee, who is a member of an approved scheme or of a statutory scheme, which are—

(i) contributions made under a rule or part of a rule, as the case may be, of a retirement benefits scheme (in this definition referred to as the ‘main scheme’) which provides specifically for the payment of voluntary contributions to a PRSA by members of the main scheme, or

(ii) contributions made under a separately arranged scheme approved by the Revenue Commissioners which is associated with the main scheme and which provides for voluntary contributions to a PRSA by members of the main scheme;

‘approved scheme’ has the same meaning as in Chapter 1 of this Part;

‘approved retirement fund’ has the meaning assigned to it by section 784A;

‘approved minimum retirement fund’ has the meaning assigned to it by section 784C;

‘contract of employment’ means—

(a) a contract of service or apprenticeship, or

(b) any other contract whereby an individual agrees with another person, who is carrying on the business of an employment agency (within the meaning of the Employment Agency Act, 1971 ) and is acting in the course of that business, to do or perform personally any work or service for a third person (whether or not the third person is party to the contract),

whether the contract is express or implied or if express, whether it is oral or in writing;

‘contributor’ means an individual who enters into a PRSA contract with a PRSA provider and an individual shall be regarded as a contributor to a PRSA notwithstanding that all contributions are made by that individual's employer;

‘director’, in relation to a company includes—

(a) in the case of a company the affairs of which are managed by a board of directors or similar body, a member of that board or body,

(b) in the case of a company the affairs of which are managed by a single director or similar person, that director or person,

(c) in the case of a company the affairs of which are managed by the members themselves, a member of that company,

and includes a person who is to be or has been a director;

‘distribution’ has the same meaning as in the Corporation Tax Acts;

‘employee’—

(a) means a person of any age, who has entered into or works under (or where the employment has ceased, entered into or worked under) a contract of employment and references, in relation to an employer, to an employee shall be construed as references to an employee employed by that employer; and for the purposes of this Chapter, a person holding office under, or in the service of, the State (including a civil servant within the meaning of the Civil Service Regulation Act, 1956 ) shall be deemed to be an employee employed by the State or Government, as the case may be, and an officer or servant of a local authority for the purposes of the Local Government Act, 2001 , or of a harbour authority, health board or vocational education committee shall be deemed to be an employee employed by the authority, board or committee, as the case may be), and

(b) in relation to a company, includes a director or other officer of the company and any other person taking part in the management of the affairs of the company;

‘employer’ means, in relation to an employee, the person with whom the employee has entered into, or for whom the employee works under (or, where the employment has ceased, entered into or worked under), a contract of employment, subject to the qualification that the person, who under a contract of employment referred to in paragraph (b) of the definition of ‘contract of employment’ is liable to pay the wages of the individual concerned, in respect of the work or service concerned shall be deemed to be the individual's employer;

‘market value’ shall be construed in accordance with section 548;

‘PPS Number’, in relation to an individual, means that individual's Personal Public Service Number within the meaning of section 223 of the Social Welfare (Consolidation) Act, 1993 ;

‘Personal Retirement Savings Account’ means a personal retirement savings account established by a contributor with a PRSA provider under the terms of a PRSA contract and the expression ‘PRSA’ shall be construed accordingly;

‘PRSA administrator’ means the PRSA provider or a person to whom a PRSA provider delegates in pursuance of Part X of the Pensions Act, 1990 , its administrative functions in relation to a PRSA, including a person appointed by the PRSA provider in accordance with section 787G(5);

‘PRSA assets’ means the assets held on behalf of a contributor in a PRSA and includes the value of any contributions made to that PRSA by any employer of the contributor;

‘PRSA contract’ means a contract entered into between a PRSA provider and a contributor in respect of a PRSA product;

‘PRSA contribution’ means a contribution within the meaning of Part X of the Pensions Act, 1990 ;

‘PRSA product’ means a PRSA product (within the meaning of Part X of the Pensions Act, 1990 ) that for the time being stands approved under section 94 of that Act;

‘PRSA provider’ has the same meaning as in Part X of the Pensions Act, 1990 ;

‘relevant payment’ in relation to a PRSA means any payment, including a distribution, made by reason of rights arising as a result of a PRSA contract and includes any annuity payable by reason of such rights;

‘retirement annuity contract’ means a contract approved by the Revenue Commissioners in accordance with Chapter 2 of this Part;

‘retirement benefits scheme’ has the same meaning as in Chapter 1 of this Part;

‘specified individual’, in relation to a year of assessment, means an individual whose relevant earnings for the year of assessment were derived wholly or mainly from an occupation or profession specified in Schedule 23A;

‘statutory scheme’ has the same meaning as in Chapter 1 of this Part.

(2) Subject to subsection (1), a word or expression that is used in this Chapter and is also used in Part X of the Pensions Act, 1990 has, except where the context otherwise requires, the same meaning in this Chapter as it has in that Part.

Relevant earnings and net relevant earnings.

787B.—(1) For the purposes of this Chapter but subject to subsection (2), ‘relevant earnings’, in relation to an individual, means any income of the individual chargeable to tax for the year of assessment in question, being any of the following—

(a) income arising in respect of remuneration from an office or employment of profit held by the individual,

(b) income from any property which is attached to or forms part of the emoluments of any such office or employment of profit held by the individual, or

(c) income which is chargeable under Schedule D and is immediately derived by the individual from the carrying on or exercise by the individual of his or her trade or profession either as an individual or, in the case of a partnership, as a partner personally acting in the partnership;

but does not include any remuneration from an investment company of which the individual is a proprietary director or a proprietary employee.

(2) For the purposes of this Chapter, the relevant earnings of an individual shall not be treated as the relevant earnings of his or her spouse, notwithstanding that the individual's income chargeable to tax is treated as his or her spouse's income.

(3) For the purposes of relief under this Chapter, an individual's relevant earnings shall be those earnings before giving effect to any deduction to be made from those earnings in respect of a loss or in respect of a capital allowance (within the meaning of section 2), and references to income in this Chapter (other than references to total income) shall be construed similarly.

(4) For the purposes of this Chapter, ‘net relevant earnings’, in relation to an individual and subject to subsections (5) to (7), means the amount of the individual's relevant earnings for the year of assessment in question less the amount of any deductions to be made from the relevant earnings in computing the individual's total income for that year, being either—

(a) deductions in respect of payments made by the individual, or

(b) deductions in respect of losses or of such allowances mentioned in subsection (3), being losses or allowances arising from activities, profits or gains of which would be included in computing relevant earnings of the individual or of the individual's spouse for the year of assessment.

(5) Where in any year of assessment for which an individual claims and is allowed relief under this Chapter there is to be made in computing the total income of the individual or of the individual's spouse a deduction in respect of any such loss or allowance of the individual referred to in subsection (4)(b), and the deduction or part of it is to be so made from income other than relevant earnings, then, the amount of the deduction made from that other income shall be treated as reducing the individual's net relevant earnings for subsequent years of assessment and shall be deducted as far as may be from those of the following year, whether or not the individual claims or is entitled to claim relief under this Chapter for that year, and in so far as it cannot be so deducted, then from those of the next year, and so on.

(6) Where an individual's income for any year of assessment consists partly of relevant earnings and partly of other income, then, as far as may be, any deductions to be made in computing the individual's total income, and which may be treated in whole or in part either as made from relevant earnings or as made from other income, shall be treated for the purposes of this section as being made from those relevant earnings in so far as they are deductions in respect of any such loss referred to in subsection (4)(b) and otherwise as being made from that other income.

(7) An individual's net relevant earnings for any year of assessment shall be computed without regard to any relief to be given for that year under this Chapter either to the individual or to the individual's spouse.

(8) Notwithstanding anything in this section, for the purposes of relief under this Chapter an individual's net relevant earnings shall not exceed €254,000 but this subsection shall not apply as regards relief for additional voluntary PRSA contributions.

PRSAs — method of granting relief for PRSA contributions.

787C.—(1) Subject to the provisions of this Chapter, relief from income tax shall be given in respect of contributions to a PRSA by an individual chargeable to tax in respect of relevant earnings from any trade, profession, office or employment carried on or held by that individual.

(2) Where relief is to be given under this Chapter in respect of any contribution made by an individual, the amount of that contribution shall, subject to this section, be deducted from or set off against the individual's relevant earnings for the year of assessment in which the contribution is paid.

(3) Where in relation to a year of assessment a contribution to a PRSA is made after the end of the year of assessment but on or before the specified return date for the chargeable period (within the meaning of Part 41) the payment may, if the individual so elects on or before that date, be treated for the purposes of this section as paid in the earlier year (and not in the year in which it is paid); but where—

(a) the amount of that contribution, together with any contributions made by the individual in the year to which the assessment relates (or treated as so paid by virtue of any previous election under this subsection), exceeds the maximum amount of the reduction which may be made under this Chapter in the individual's relevant earnings for that year, or

(b) the amount of that PRSA contribution itself exceeds the increase in that maximum amount which is due to taking into account the income on which the assessment is made,

the election shall have no effect as respects the excess.

(4) Where in any year of assessment a reduction or a greater reduction would be made under this section in the relevant earnings of an individual but for an insufficiency of net relevant earnings, the amount of the reduction which would be made but for that reason, less the amount of any reduction which is made in that year, shall be carried forward to the next year of assessment, and shall be treated for the purposes of relief under this Chapter as the amount of a qualifying contribution paid in that next year of assessment.

(5) If and in so far as an amount once carried forward under subsection (4) (and treated as the amount of a qualifying payment made in the next year of assessment) is not deducted from or set off against the individual's net relevant earnings for that year of assessment, it shall be carried forward again to the following year of assessment (and treated as the amount of a qualifying payment made in that year of assessment), and so on for succeeding years.

(6) Where relief under this Chapter for any year of assessment is claimed and allowed (whether or not relief is then to be given for that year), and afterwards there is made any additional assessment, alteration of an assessment, or other adjustment of the claimant's liability to tax, there shall be made also such adjustments, if any, as are consequential thereon in the relief allowed or given under this Chapter for that or any subsequent year of assessment.

(7) Where relief under this Chapter is claimed and allowed for any year of assessment in respect of any contribution, relief shall not be given in respect of that contribution under any other provision of the Income Tax Acts for the same or a later year of assessment.

Claims to relief.

787D.—(1) Relief shall not be given under this Chapter in respect of a contribution to a PRSA except on a claim made to and allowed by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within 21 days after the notification to that person of the decision, appeal to the Appeal Commissioners.

(2) The Appeal Commissioners shall hear and determine an appeal to them under subsection (1) as if it were an appeal to them against an assessment to income tax, and the provisions of the Income Tax Acts relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall, with the necessary modifications, apply accordingly.

Extent of relief.

787E.—(1) Subject to this section, the amount which may be deducted or set off in any year in respect of contributions made by, or deemed in accordance with subsection (2) to have been made by, an individual to one or more PRSA products, hereafter in this section referred to as the maximum allowable contribution, shall not be more than—

(a) in the case of an individual who at any time during the year of assessment was of the age of 30 years or over but had not attained the age of 40, 25 per cent,

(b) in the case of an individual who at any time during the year of assessment was of the age of 40 years or over or who for the year of assessment was a specified individual, 30 per cent,

(c) in any other case, 15 per cent,

of the individual's net relevant earnings for that year of assessment.

(2) Where for a year of assessment a sum is chargeable to tax in accordance with section 118(5) in respect of a contribution by an employer to a PRSA, the employee shall, in addition to any contributions actually made by the employee, be deemed, for the purposes of this section, to have made contributions to the said PRSA in that year of assessment equal to such sum.

(3) Where during a year of assessment an individual is a member either of an approved scheme or of a statutory scheme (hereafter in this subsection referred to as a ‘scheme’) in relation to an office or employment, the following provisions shall apply, that is to say—

(a) relief shall be allowed under this Chapter as regards relevant earnings from that office or employment only in respect of contributions that are additional voluntary PRSA contributions,

(b) notwithstanding subsection (1), the amount which may be deducted or set off in that year of assessment in respect of such contributions against the individual's net relevant earnings from that office or employment shall not be more than—

(i) in the case of an individual who at any time during the year of assessment was of the age of 30 years or over but had not attained the age of 40 years, 20 per cent,

(ii) in the case of an individual who at any time during the year of assessment was of the age of 40 years or over but had not attained the age of 50 years, 25 per cent,

(iii) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over, 30 per cent, and

(iv) in any other case, 15 per cent,

of the remuneration for that year of the office or employment in respect of which the contributions are made, reduced by the amount of any contributions of the individual in the year to any scheme related to the office or employment of which he or she is a member,

(c) the amount of the net relevant earnings of the individual in respect of which any other PRSA contributions are to be deducted or set off shall be reduced by the amount of the remuneration from such office or employment, and

(d) notwithstanding sections 787K and 787L, the aggregate benefits under—

(i) all schemes, of which the individual is a member, related to the office or employment, and

(ii) all Personal Retirement Savings Accounts to which the individual is the contributor of additional voluntary PRSA contributions,

shall not exceed the maximum benefits that could be provided for the individual by reference to section 772.

(4) Notwithstanding subsection (1), where the maximum allowable contribution would but for this subsection be less than €1,525, subsection (1) shall apply as if the said maximum allowable contribution were €1,525.

(5) Where an individual is entitled to relief for a year of assessment under Chapter 2 of this Part in respect of a qualifying premium, the maximum allowable contribution for that year of assessment, other than additional voluntary PRSA contributions, shall be reduced by the amount of such relief.

Transfers to PRSAs.

787F.—To the extent that any contribution to one or more than one PRSA is made from—

(a) the value of accrued rights under a retirement annuity contract,

(b) the value of accrued rights under an approved scheme or a statutory scheme, or

(c) a repayment of contributions to which section 780(2) would, but for subsection (2A) (inserted by the Pensions (Amendment) Act, 2002) of that section, otherwise apply,

it shall not be taken into account for the purposes of section 787E and no relief shall be allowed under this Chapter in respect of such a contribution.

Taxation of payments from a PRSA.

787G.—(1) Subject to subsections (2), (3) and (4)—

(a) the amount or value of any assets that a PRSA administrator makes available to, or pays to, a PRSA contributor or to any other person, including any annuity where the whole or part of the consideration for the grant of the annuity consisted of assets which, at the time of application of the said assets for the purchase of the annuity, were PRSA assets, shall be treated as a payment to the PRSA contributor of emoluments to which Schedule E applies and, accordingly, the provisions of Chapter 4 of Part 42 shall apply to any such payment or amount treated as a payment, and

(b) the PRSA administrator shall deduct tax from the assets at the higher rate for the year of assessment in which the assets are made available unless the PRSA administrator has received from the Revenue Commissioners a certificate of tax credits and standard rate cut-off point or a tax deduction card for that year in respect of the PRSA contributor.

(2) A PRSA administrator shall be liable to pay to the Collector-General the income tax which the PRSA administrator is required to deduct from any assets of a PRSA by virtue of this section and the individual beneficially entitled to assets held in a PRSA, including the personal representatives of a deceased individual who was so entitled prior to that individual's death, shall allow such deduction; but where there are no funds or insufficient funds available out of which the PRSA administrator may satisfy the tax required to be deducted, the amount of such tax for which there are insufficient funds available shall be a debt due to the PRSA administrator from the individual beneficially entitled to the assets in the PRSA or from the estate of the deceased individual, as the case may be.

(3) Subsection (1) shall not apply where the assets made available from a PRSA are—

(a) an amount made available, at the time assets of the PRSA are first made available to the PRSA contributor, by way of lump sum not exceeding 25 per cent of the value of the assets in the PRSA at that time or, in the case of a PRSA to which additional voluntary PRSA contributions were made, an amount not exceeding the amount that may be paid by way of lump sum in accordance with section 772(3)(f) in conjunction with the rules of the scheme,

(b) an amount transferred to an approved retirement fund or to an approved minimum retirement fund in accordance with section 787H,

(c) an amount made available to the personal representatives of the PRSA contributor in accordance with section 787K(1)(c)(iii),

(d) a transfer of assets from a PRSA to another PRSA, an approved scheme or a statutory scheme where—

(i) in relation to that other PRSA, approved scheme or statutory scheme the contributor to the first-mentioned PRSA is either a contributor or a member as the case may be, and

(ii) the first-mentioned PRSA is not a PRSA in respect of which a lump sum to which paragraph (a) applies has been paid or made available.

(4) For the purposes of this Chapter, the circumstances in which a PRSA administrator shall be treated as making assets of a PRSA available to an individual shall include—

(a) the making of a relevant payment by the PRSA administrator,

(b) any circumstances whereby assets cease to be assets of the PRSA, and

(c) any circumstances whereby assets cease to be beneficially owned by the contributor to the PRSA.

(5) At any time when a PRSA administrator or a PRSA provider, as the case may be—

(a) is not resident in the State, or

(b) is not trading in the State through a fixed place of business,

the PRSA provider shall ensure that there is a person resident in the State and appointed by the PRSA provider to be responsible for the discharge of all duties and obligations relating to Personal Retirement Savings Accounts which are imposed on the PRSA administrator or the PRSA provider by virtue of this Chapter and shall notify the Revenue Commissioners of the identity of that person and the fact of that person's appointment.

(6) Notwithstanding subsection (1), where assets of a PRSA are treated under subsection (4) as having been made available to an individual, the provisions of section 784A(4) shall apply as if assets of that PRSA at the time of death of that individual were assets of an approved retirement fund.

Approved Retirement Fund option.

787H.—(1) At any time assets of a PRSA are allowed to be made available to a beneficiary in accordance with section 787K, that individual may opt to have those assets transferred to an approved retirement fund and the PRSA administrator shall make that transfer.

(2) The assets that a PRSA administrator shall transfer to an approved retirement fund in accordance with subsection (1) shall be the assets available in the PRSA at the time the election under that subsection is made less—

(a) any lump sum the PRSA administrator is permitted to pay without deduction of tax in accordance with section 787G(3)(a), and

(b) any amount the PRSA administrator is required to transfer to an approved minimum retirement fund in accordance with section 784C, by virtue of subsection (3).

(3) Where an individual opts in accordance with subsection (1), sections 784A to 784D shall apply as if that option were an option in accordance with section 784(2A).

Exemption of PRSA.

787I.—(1) Exemption from income tax shall, on a claim being made in that behalf, be allowed in respect of income derived from investments or deposits of a PRSA if, or to such extent as the Revenue Commissioners are satisfied that, it is income from investments or deposits held for the purposes of the PRSA.

(2) (a) In this subsection, ‘financial futures’ and ‘traded options’ mean respectively financial futures and traded options for the time being dealt in or quoted on any futures exchange or any stock exchange, whether or not that exchange is situated in the State.

(b) For the purposes of subsection (1), a contract entered into in the course of dealing in financial futures or traded options shall be regarded as an investment.

(3) Exemption from income tax shall, on a claim being made in that behalf, be allowed in respect of underwriting commissions if, or to such extent as the Revenue Commissioners are satisfied that, the underwriting commissions are applied for the purposes of the PRSA, and in respect of which the administrator of the PRSA would, but for this subsection, be chargeable to tax under Case IV of Schedule D.

Allowance to employer.

787J.—(1) For the purposes of this section—

(a) a reference to a ‘chargeable period’ shall be construed as a reference to a ‘chargeable period or its basis period’ (within the meaning of section 321), and

(b) in relation to an employer whose chargeable period is a year of assessment, ‘basis period’ means the period on the profits or gains of which income tax for that year of assessment is to be finally computed for the purposes of Case I or II of Schedule D in respect of the trade, profession or vocation of the employer.

(2) Subject to subsection (3), any sum paid by an employer by way of contribution under a PRSA contract of an employee shall for the purposes of Case I or II of Schedule D and of sections 83 and 707(4) be allowed to be deducted as an expense, or expense of management, incurred in the chargeable period in which the sum is paid but no other sum shall for those purposes be allowed to be deducted as an expense, or expense of management, in respect of the making, or any provision for the making, of any contributions under the PRSA contract.

(3) The amount of an employer's contributions which may be deducted under subsection (2) shall not exceed the amount contributed by that employer to Personal Retirement Savings Accounts in respect of employees in a trade or undertaking in respect of the profits of which the employer is assessable to income tax or corporation tax, as the case may be.

Revenue approval of PRSA products.

787K.—(1) Subject to subsection (2) and to sections 787H and 787L, the Revenue Commissioners shall not approve, for the purposes of section 94 (3) of the Pensions Act, 1990 , a PRSA product (within the meaning of Part X of that Act) unless it appears to them to satisfy the following conditions—

(a) that the arrangements in respect of that product will be entered into by an individual with a person lawfully carrying on in the State the business of a PRSA provider,

(b) that it includes provision securing that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment, and

(c) that it does not—

(i) provide for the payment of any sum or the making available of PRSA assets, by that person during the life of the individual of any sum except—

(I) sums payable by means of annuity to the individual,

(II) a sum payable without deduction of tax by way of lump sum, in accordance with section 787G(3)(a),

(III) assets transferred to an approved retirement fund or to an approved minimum retirement fund, in accordance with section 787H(1), or

(IV) assets made available to the PRSA contributor by the PRSA administrator, where the PRSA administrator retains such assets as would be required to be transferred to an approved minimum retirement fund if the PRSA contributor opted in accordance with section 787H(1),

(ii) provide for the annuity or other sums payable to the individual to commence or for assets to be made available to the individual before the individual attains the age of 60 years or after he or she attains the age of 75 years,

(iii) provide for the payment by that person of any other sums except sums payable by means of annuity to the individual's widow or widower and any sums which, in the event of no annuity or other benefits becoming payable either to the individual or to a widow or widower, are payable to the individual's personal representatives by way of transfer of the PRSA assets to the estate of the PRSA contributor,

(iv) provide for the annuity, if any, payable to a widow or widower of the individual to be of a greater annual amount than that paid or payable to the individual, or

(v) provide for the payment of any annuity otherwise than for the life of the annuitant.

(2) The Revenue Commissioners may, if they think fit and subject to any conditions they think proper to attach to the approval under section 94 of the Pensions Act, 1990 , approve, for the purposes of section 94(3) of that Act, a product otherwise satisfying the conditions referred to in subsection (1), notwithstanding that the product provides for one or more of the following matters—

(a) the payment to the individual of an annuity or other sums or the making available of assets of the PRSA to the individual commencing before he or she attains the age of 60 years, where the annuity or other sums are payable on the individual becoming permanently incapable through infirmity of mind or body of carrying on his or her own occupation or any occupation of a similar nature for which he or she is trained or fitted,

(b) in the case of an individual being an employee, the payment to the individual of an annuity or other sums or the making available of assets of the PRSA to the individual commencing on retirement at age 50 or over,

(c) where the individual's occupation is one in which persons customarily retire before attaining the age of 60 years, the payment of the annuity or other sums to commence or the making available of assets of the PRSA to commence before the individual attains that age (but not before he or she attains the age of 50 years),

(d) the annuity payable to any person to continue for a term certain (not exceeding 10 years) notwithstanding his or her death within that term, or the annuity payable to any person to terminate, or be suspended, on marriage (or remarriage) or in other circumstances,

(e) in the case of an annuity which is to continue for a term certain, the annuity to be assignable by will and, in the event of any person dying entitled to the annuity, the annuity to be assignable by his or her personal representatives in the distribution of the estate so as to give effect to a testamentary disposition, or to the rights of those entitled on intestacy or to an appropriation of the annuity to a legacy or to a share or interest in the estate.

(3) Where, having regard to the provisions of this Chapter, the Revenue Commissioners are, at any time, of the opinion that approval of a product under section 94 of the Pensions Act, 1990 , ought to be withdrawn they shall give notice in writing to the Pensions Board of that opinion and such a notice shall specify the grounds on which they formed that opinion.

(4) Where approval of a product is withdrawn pursuant to section 97 of the Pensions Act, 1990 , there shall be made such assessments or amendment of assessments as may be appropriate for the purpose of withdrawing any relief given under this Chapter consequent on the grant of the approval.

Transfers to and from PRSA.

787L.—(1) In addition to the requirements imposed by section 787K for the granting of such approval, the Revenue Commissioners shall not approve, for the purposes of section 94 (3) of the Pensions Act, 1990 , a PRSA product (within the meaning of Part X of that Act) unless the product provides that the individual who has entered into the arrangements in respect of it may require a sum representing the value of his or her accrued rights under the product—

(a) to be paid by the person with whom the individual has entered into such arrangements to such other person as the individual may specify, and

(b) to be applied by such other person in payment either of a contribution under a PRSA contract made between the individual and that other person or a contribution under an approved scheme of which the individual is a member.

(2) Without prejudice to subsection (1), the Revenue Commissioners shall not approve, for the purposes of section 94 (3) of the Pensions Act, 1990 , a PRSA product (within the meaning of Part X of that Act) unless the product provides that the PRSA provider may receive contributions from—

(a) another PRSA in respect of which the contributor to the first-mentioned PRSA is the contributor,

(b) either an approved scheme or a statutory scheme in respect of which the contributor to the first-mentioned PRSA is a member, or

(c) a contract approved by the Revenue Commissioners in accordance with Chapter 2 of this Part to which the contributor to the first-mentioned PRSA is a party.

(3) References in subsection (1) to the individual by whom a contract is made include references to any widow, widower or dependant having accrued rights under the contract.”,

(vi) in section 788(2)—

(I) by the substitution in paragraph (e) of “capital),” for “capital), or”,

(II) by the substitution in paragraph (f) of “784C, or” for “784C.”, and

(III) by the insertion of the following paragraph after paragraph (f):

“(g) any annuity where the whole or part of the consideration for the grant of the annuity consisted of assets which, at the time of the application of the said assets for the purchase of the annuity, were PRSA assets, within the meaning of Chapter 2A of this Part.”,

(e) in part 42, by the substitution, in subparagraph (ii) of paragraph (g) (inserted by the Finance Act, 2001 ) of section 986(1) of “Chapter 1 or Chapter 2A of Part 30” for “Chapter 1 of Part 30”, and

(f) in Schedule 2B, by the insertion of the following after paragraph 9:

“Declaration of PRSA Administrator

9A. The declaration referred to in section 739D(6)(i) is a declaration in writing to the investment undertaking which—

(a) is made by a PRSA administrator (in this paragraph referred to as the ‘declarer’) in respect of units which are assets in a PRSA,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time when the declaration is made, the units in respect of which the declaration is made—

(i) are assets of a PRSA, and

(ii) are managed by the declarer for the individual who is beneficially entitled to the units,

(e) contains the name, address and tax reference number of the individual referred to in subparagraph (d),

(f) contains an undertaking by the declarer that if the units cease to be assets of the PRSA, including a case where the units are transferred to another PRSA, the declarer will notify the investment undertaking accordingly, and

(g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.”.