Finance Act 2005

Permanent Page URL

Retirement benefits.

21.—(1) The Principal Act is amended—

(a) in Chapter 1 of Part 30—

(i) in section 770(1)—

(I) by substituting the following for the definition of “administrator”:

“ ‘administrator’, in relation to a retirement benefits scheme, means the person or persons, established in a Member State of the European Communities, having the management of the scheme, and references to the administrator of a scheme shall be deemed to include the person mentioned in section 772(2)(c)(ii);”,

(II) by inserting the following after the definition of “final remuneration”:

“ ‘overseas pension scheme’ means a retirement benefits scheme, other than a state social security scheme, which is—

(a) operated or managed by an Institution for Occupational Retirement Provision as defined by Article 6(a) of Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003¹ , and

(b) established in a Member State of the European Communities, other than the State, which has given effect to that Directive in its national law;”,

(III) by inserting the following after the definition of “relevant date”:

“ ‘retirement benefits scheme’ has the meaning assigned to it by section 771;”,

and

(IV) by inserting the following after the definition of “service”:

“ ‘state social security scheme’ means a system of mandatory protection put in place by the Government of a country or territory, other than the State, to provide a minimum level of retirement income or other benefits, the level of which is determined by that Government;”,

(ii) in section 771(2) by inserting “contract,” after “References in this Chapter to a scheme include references to a”,

(iii) in section 772(2) by substituting the following for paragraph (c):

“(c) that in relation to the discharge of all duties and obligations imposed on the administrator of a scheme by this Chapter—

(i) the administrator of an overseas pension scheme has entered into a contract with the Revenue Commissioners enforceable in a Member State of the European Communities in relation to the discharge of those duties and obligations and in entering into such a contract the parties to the contract have acknowledged and agreed in writing that—

(I) it is governed solely by the laws of the State, and

(II) that the courts of the State have exclusive jurisdiction in determining any dispute arising under it,

(ii) there is a person resident in the State, appointed by the administrator, who will be responsible for the discharge of all of those duties and obligations and the administrator shall notify the Revenue Commissioners of the appointment of that person and the identity of that person;”,

(iv) in section 774 by substituting the following for subsection (1):

“(1) This section shall apply as respects—

(a) any approved scheme shown to the satisfaction of the Revenue Commissioners to be established under irrevocable trusts,

(b) any approved scheme which is an overseas pension scheme, or

(c) any other approved scheme as respects which the Revenue Commissioners, having regard to any special circumstance, direct that this section shall apply,

and any scheme which is for the time being within paragraph (a), (b) or (c) is in this Chapter referred to as an ‘exempt approved scheme’.”,

and

(v) in section 779 by substituting the following for subsection (1):

“(1) Subject to subsection (2), pensions paid under any scheme, including an overseas pension scheme, which is approved or is being considered for approval under this Chapter shall, notwithstanding anything in section 18 or 19, be charged to tax under Schedule E, and Chapter 4 of Part 42 shall apply accordingly.”,

(b) in Chapter 2 of Part 30—

(i) in section 784—

(I) by substituting the following for subsection (2)(a)(i):

“(i) that it is made by the individual with a person lawfully carrying on the business of granting annuities on human life, and, where that person—

(I) is not resident in the State, or

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

that person is an insurance undertaking authorised to transact insurance business in the State under Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002¹ ,”,

(II) in subsection (2B)(a) by substituting “shall, notwithstanding anything in section 18 or 19,” for “shall” where it first occurs, and

(III) by inserting the following after subsection (4):

“(4A) At any time when the person referred to in subsection (2)(a)(i) or in section 785(1)—

(a) is not resident in the State, or

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

the person shall, in relation to the discharge of all duties and obligations imposed by this section or, as the case may be, by section 785—

(i) enter into a contract with the Revenue Commissioners enforceable in a Member State of the European Communities in relation to the discharge of those duties and obligations and in entering into such a contract the parties to the contract shall acknowledge and agree in writing that—

(I) it is governed solely by the laws of the State, and

(II) that the courts of the State shall have exclusive jurisdiction in determining any dispute arising under it,

(ii) ensure that there is a person resident in the State (referred to in this paragraph as the ‘appointed person’), appointed by the person, to be responsible for the discharge of those duties and obligations and the person shall notify the Revenue Commissioners of the appointment of the appointed person and the identity of the appointed person.

(4B) The Revenue Commissioners may by notice in writing require the person to whom premiums are payable under any contract for the time being approved under this section or under section 785, or the appointed person referred to in subsection (4A)(ii), as the case may be, to provide, within 30 days of the date of such notice, such information and particulars as may be specified in the notice as they may reasonably require for the purposes of this Chapter, and, without prejudice to the generality of the foregoing, such information and particulars may include—

(a) the name, address and PPS Number (within the meaning of section 787A(1)) of the individual with whom the contract has been made,

(b) the name, address and PPS Number (within that meaning) of the individual or individuals to whom any payment of an annuity in respect of the contract has been made, and

(ii) in section 784A—

(I) in subsection (3)(a) by substituting “shall, notwithstanding anything in section 18 or 19,” for “shall” where it first occurs,

(II) in subsection (7) by substituting the following for paragraph (a):

“(a) At any time when the qualifying fund manager—

(i) is not resident in the State, or

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

the qualifying fund manager shall, in relation to the discharge of all duties and obligations relating to approved retirement funds which are imposed on the qualifying fund manager by virtue of this Chapter—

(I) enter into a contract with the Revenue Commissioners enforceable in a Member State of the European Communities in relation to the discharge of those duties and obligations and in entering into such a contract the parties to the contract shall acknowledge and agree in writing that—

(A) it shall be governed solely by the laws of the State, and

(B) that the courts of the State shall have exclusive jurisdiction in determining any dispute arising under it,

(II) ensure that there is a person resident in the State, appointed by the qualifying fund manager, who will be responsible for the discharge of all of those duties and obligations and shall notify the Revenue Commissioners of the appointment of that person and the identity of that person.”,

and

(III) by inserting the following subsection after subsection (8):

“(9) The Revenue Commissioners may by notice in writing require a qualifying fund manager or the person appointed under subsection (7)(a)(II), as the case may be, to provide within 30 days of the date of such notice, such information and particulars as may be specified in the notice as they may reasonably require for the purposes of this Chapter, and without prejudice to the generality of the foregoing, such information and particulars may include—

(a) the name, address and tax reference number of the individual in whose name the approved retirement fund is or was held,

(b) the name, address and tax reference number of any individual to whom any distribution has been made, and

(iii) in section 784C(4)(a) by substituting “is in receipt of” for “is entitled to”, and

(iv) in section 785 by inserting the following after subsection (1):

“(1A) For the purposes of subsection (1), the reference in subsection (1) to a person lawfully carrying on in the State the business of granting annuities on human life shall include a reference to an insurance undertaking, authorised to transact insurance business in the State under Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002¹ , that—

(a) is not resident in the State, or

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

(i) in subsection (1) of section 787A by substituting “in accordance with section 787G(5)(ii)” for “in accordance with section 787G(5)”, in the definition of “PRSA administrator”,

(ii) in section 787G—

(I) in subsection (1)(a) by substituting “shall, notwithstanding anything in section 18 or 19,” for “shall”, where it first occurs,

(II) by substituting the following for subsection (5):

“(5) At any time when a PRSA administrator—

(a) is not resident in the State, or

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

the PRSA administrator shall, in relation to the discharge of all duties and obligations relating to Personal Retirement Savings Accounts which are imposed on the PRSA administrator by virtue of this Chapter—

(I) it shall be governed solely by the laws of the State, and

(II) that the courts of the State shall have exclusive jurisdiction in determining any dispute arising under it,

(ii) ensure that there is a person resident in the State, appointed by the PRSA administrator, who will be responsible for the discharge of all of those duties and obligations and shall notify the Revenue Commissioners of the appointment of that person and the identity of that person.”,

and

(III) by inserting the following subsection after subsection (5):

“(5A) The Revenue Commissioners may by notice in writing require a PRSA administrator, a PRSA provider or the person appointed under subsection (5)(ii), as the case may be, to provide, within 30 days of the date of such notice, such information and particulars as may be specified in the notice as they may reasonably require for the purposes of this Chapter, and, without prejudice to the generality of the foregoing, such information and particulars may include—

(a) the name, address and PPS Number of the PRSA contributor,

(b) the name, address and PPS Number of any person to whom any payments have been made, or to whom any assets have been made available, by the PRSA administrator or the PRSA provider, and

(d) by inserting the following after Chapter 2A—

“Chapter 2B

Overseas Pension Plans: Migrant Member Relief

Interpretation and general (Chapter 2B).

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

‘administrator’, in relation to an overseas pension plan, means the person or persons having the management of the plan;

‘contributions’ include premia;

‘certificate of contributions’ means a certificate obtained by the relevant migrant member from the administrator and provided to the Revenue Commissioners, in a form to be furnished by the Revenue Commissioners for that purpose, containing for each calendar year the following particulars in respect of the relevant migrant member of the plan—

(a) his or her name, address, PPS Number and policy reference number,

(b) the contributions paid by him or her under the plan in that year, and

(c) where relevant, the contributions, if any, paid under the plan in that year in respect of him or her by, or on behalf of, his or her employer;

‘overseas pension plan’ means a contract, an agreement, a series of agreements, a trust deed or other arrangements, other than a state social security scheme, which is established in, or entered into under the law of, a Member State of the European Communities, other than the State;

‘national of a Member State of the European Communities’ means any individual possessing the nationality or citizenship of a Member State of the European Communities;

‘policy reference number’ means the unique identifying number of a relevant migrant member in relation to an overseas pension plan;

‘PPS Number’ means a personal public service number within the meaning of section 223 of the Social Welfare (Consolidation) Act 1993 ;

‘qualifying overseas pension plan’ means an overseas pension plan—

(a) which is in good faith established for the sole purpose of providing benefits of a kind similar to those referred to in Chapters 1, 2, or 2A of this Part,

(b) in respect of which tax relief is available under the law of the Member State of the European Communities in which the plan is established in respect of any contributions paid under the plan, and

‘relevant migrant member’ means an individual who is a resident of the State and who is a member of a qualifying overseas pension plan and who, in relation to any contributions paid under the plan—

(a) was, at the time the individual first became a member of the pension plan, a resident of a Member State of the European Communities, other than the State, and entitled to tax relief in respect of contributions paid under the plan under the law of that Member State of the European Communities,

(b) was a member of the pension plan at the beginning of the period in which the individual became a resident of the State,

(c) was, immediately before the beginning of that period, resident outside of the State for a continuous period of 3 years, and

(d) (i) is a national of a Member State of the European Communities, or

(ii) not being such an individual, was a resident of a Member State of the European Communities, other than the State, immediately before becoming a resident of the State;

‘resident’ means—

(a) in the case of a Member State of the European Communities with the Government of which arrangements having the force of law by virtue of section 826(1)(a) have been made, that the individual is regarded as being a resident of that State under those arrangements, and

(b) in any other case, that the individual is by virtue of the law of that State a resident of that State for the purposes of tax;

‘state social security scheme’ means a system of mandatory protection put in place by the Government of a country or territory, other than the State, to provide a minimum level of retirement income or other benefits, the level of which is determined by that Government;

‘tax reference number’ means, in relation to an institution operating or managing an overseas pension plan, the unique identification number allocated to the institution by a Member State of the European Communities, other than the State, for the purposes of taxation, and where more than one such number has been allocated, the reference number appropriate to the business in the course of which the overseas pension plan was issued.

(2) The requirements referred to in paragraph (c) of the definition of ‘qualifying overseas pension plan’ in subsection (1) are that the relevant migrant member—

(a) obtains from the administrator of the plan and provides to the Revenue Commissioners in such form and manner as they may specify—

(i) such evidence as they may reasonably require to verify the position in relation to paragraphs (a) and (b) of the definition of ‘qualifying overseas pension plan’ in subsection (1), and

(ii) the following particulars in relation to the plan—

(I) the name, address and tax reference number of the institution operating or managing the plan,

(II) the policy reference number of the relevant migrant member of the plan,

(III) the date on which the relevant migrant member became a member of the plan,

(IV) the date on which contributions under the plan first became payable,

(V) the date on which benefits under the plan first become payable,

and

(b) has irrevocably instructed the administrator of the plan to provide to the Revenue Commissioners such information as they may reasonably require in relation to any payments made under the plan.

Qualifying overseas pension plans: relief for contributions.

787N.—(1) Where in any year of assessment, contributions are paid to any qualifying overseas pension plan—

(a) by a relevant migrant member of that plan, or

(b) by, or on behalf of, an employer in respect of an employee (within the meaning of Chapter 1) who is a relevant migrant member of that plan,

then, where the relevant migrant member has provided a certificate of contributions, relief for that year of assessment under the provisions of section 774(6), 774(7) and 778(1) of Chapter 1 (which relates to occupational pension schemes), or, as the case may be, section 787 of Chapter 2 (which relates to retirement annuities), or sections 787C, 787E, 787F or 787J of Chapter 2A (which relates to personal retirement savings accounts), shall, with any necessary modifications, apply to those contributions as if—

(i) the qualifying overseas pension plan was an exempt approved scheme under Chapter 1 or an annuity contract for the time being approved by the Revenue Commissioners under Chapter 2, or a PRSA product approved under Chapter 2A for the purposes of section 94 (3) of the Pensions Act 1990 , and

(ii) the relevant migrant member of the qualifying overseas pension plan was—

(I) an employee within the meaning of Chapter 1,

(II) an individual referred to in section 784(1) of Chapter 2, or

(III) an individual referred to in Chapter 2A.

(2) An individual who would be a relevant migrant member of a qualifying overseas pension plan but for the fact that he or she fails to meet the requirement in paragraph (c) of the definition of ‘relevant migrant member’ in section 787M shall, notwithstanding that, be treated as a relevant migrant member if the Revenue Commissioners are of the opinion that in all the circumstances the failure of the individual to meet the condition ought to be disregarded for that purpose.

(3) (a) The Revenue Commissioners may by notice in writing require the administrator of a qualifying overseas pension plan who has received an irrevocable instruction as provided for in section 787M(2)(b), to provide within 30 days of the date of such notice such information and particulars, in relation to payments under the plan, as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(b) The notice referred to in paragraph (a) shall specify—

(i) the information and particulars required by the Revenue Commissioners, and

(ii) the form and manner in which such information and particulars are to be provided.”,

(e) in Chapter 4—

(i) by substituting the following for section 790A:

“Limit on earnings.

790A.—Notwithstanding anything in this Part, for the purposes of giving relief to an individual under—

(a) Chapter 1 in respect of an employee's contribution to a retirement benefits scheme,

(b) Chapter 2 in respect of a qualifying premium under an annuity contract,

(d) Chapter 2B in respect of a contribution to an overseas pension plan,

the aggregate of the individual's remuneration, within the meaning of Chapter 1 and that Chapter as applied by Chapter 2B, and net relevant earnings, within the meaning of Chapters 2 and 2A and those Chapters as applied by Chapter 2B, shall not exceed €254,000.”,

and

(ii) by inserting the following after section 790A:

“Exemption of crossborder scheme.

790B.—(1) In this section—

‘competent authority’, in relation to the State, means the national authority designated to carry out the duties provided for in the Directive arising from the transposition of the Directive into the law of the State;

‘Directive’ means Directive 2003/41/EC of the European Council and of the Parliament of 3 June 2003¹ on the activities and supervision of institutions for occupational retirement provision;

‘European undertaking’, in relation to a scheme, means an undertaking located in a European State which makes or proposes to make contributions to a scheme in respect of European members;

‘European members’ means individuals who are or have been employed or selfemployed in a European State and in respect of which employment or self employment the trustees of the scheme have accepted or propose to accept contributions from the European undertaking;

‘European State’ means a Member State of the European Communities other than the State;

‘scheme’ means an occupational pension scheme established in the State under irrevocable trusts which provides, or is capable of providing, retirement benefits (within the meaning of Article 6(d) of the Directive) in relation to European members;

‘trustees’, in relation to a scheme, means the trustees of the scheme;

‘undertaking’ means any undertaking or other body, regardless of whether it includes or consists of one or more persons, which acts as an employer or as an association, or other representative body, of self employed persons.

(2) Subsections (3) and (4) shall apply to any scheme in respect of which, arising from the transposition of the Directive into the law of the State, the trustees have received from the competent authority—

(a) an authorisation, and

(b) an approval,

to accept contributions from a European undertaking in respect of European members, which authorisation has not been revoked.

(3) (a) 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 scheme, 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 scheme.

(b) (i) 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.

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

(c) 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 scheme, and in respect of which the trustees of the scheme would but for this subsection be chargeable to tax under Case IV of Schedule D.

(4) For the purposes of sections 172A(1), 256(1) and 739B(1), the reference to ‘an exempt approved scheme within the meaning of section 774’ in the definition of ‘pension scheme’ in those sections shall be deemed to include a reference to a scheme referred to in subsection (2).”,

(f) in Schedule 23—

(i) in paragraph 1 by inserting “in such form and manner as they may specify” after “Revenue Commissioners” where it first occurs,

(ii) in paragraph 2:

(I) by deleting “and” in subparagraph (b)(ii),

(II) in subparagraph (b)(iii) by substituting “employer, and,” for “employer;”, and

(III) by inserting the following after paragraph (b)(iii):

“(iv) payments by means of pension, gratuity or other like benefits;”,

(iii) by inserting the following after paragraph 2:

“2A Any such return, copy of accounts, information and particulars required to be provided under paragraph 2 shall be in such form and manner as may be specified in the notice under that paragraph.”,

and

(iv) in paragraph 4, subparagraph (2), by substituting “in section 772(2)(c)(ii).” for “in section 772(2)(c).”.

(2) (a) Paragraph (a) of subsection (1) shall apply as respects any retirement benefits scheme (within the meaning of section 771 of the Principal Act) approved on or after 1 January 2005.

(b) Paragraph (b), other than subparagraph (iii), of subsection (1) shall apply as respects any annuity contract for the time being approved by the Revenue Commissioners under section 784 of the Principal Act entered into on or after 1 January 2005.

(c) Subparagraph (iii) of paragraph (b) of subsection (1) shall apply as respects any exercise of an option in accordance with subsection (2A) of section 784 of the Principal Act, on or after 3 February 2005.

(d) Paragraph (c) of subsection (1) shall apply as respects any PRSA contract (within the meaning of section 787A of the Principal Act) entered into on or after 1 January 2005 in respect of a PRSA product (within the meaning of Part X of the Pensions Act 1990 ) approved by the Revenue Commissioners under section 787K of the Principal Act.

(e) Paragraph (d) of subsection (1) shall apply as respects contributions to a qualifying overseas pension plan made on or after 1 January 2005.

(f) Subparagraph (i) of paragraph (e) of subsection (1) shall apply as on and from 1 January 2005.

(g) Subparagraph (ii) of paragraph (e) of subsection (1) shall come into operation on such day or days as the Minister for Finance may by order appoint and different days may be appointed for different purposes or different provisions.

(h) Paragraph (f) of subsection (1) shall apply as on and from 1 January 2005.

¹OJ No. L235, 23.9.2003, p.10

¹OJ No. L345, 19.12.2002, p.1

¹OJ No. L235, 23.9.2003, p.10

Finance Act 2005 Permanent Page URL

Finance Act 2005

Permanent Page URL