Finance Act 2024
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Employer contributions to PRSAs and PEPPs | ||
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12. The Principal Act is amended— | ||
(a) in section 118, by the substitution of the following subsection for subsection (5): | ||
“(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, civil partner, children or dependants, or for the children of the director’s or employee’s civil partner, of any— | ||
(a) pension, annuity, lump sum or gratuity, | ||
(b) contribution to a Personal Retirement Savings Account (within the meaning of Chapter 2A of Part 30), provided that contribution does not exceed the employer limit (within the meaning of section 787A), | ||
(c) contribution to a PEPP (within the meaning of Chapter 2D of Part 30), provided that contribution does not exceed the employer limit (within the meaning of section 787V), or | ||
(d) other like benefit to be given on the death or retirement of the director or employee.”, | ||
(b) in section 787A(1), by the insertion of the following definitions: | ||
“ ‘emoluments’ has the same meaning as in Chapter 4 of Part 42; | ||
‘employer limit’, in relation to a contribution by an employer to an employee’s PRSA, means an amount not exceeding— | ||
(a) 100 per cent of the employee’s emoluments in the year of assessment from that employer, or | ||
(b) where the employee’s emoluments for the year of assessment from that employer are lower than that employee’s emoluments for the previous year of assessment from that employer by virtue of— | ||
(i) receipt of a benefit paid under the Social Welfare Consolidation Act 2005 to which section 126 applies, | ||
(ii) a period of unpaid leave approved by the employer, or | ||
(iii) a period of sick leave at a reduced rate of emoluments or in respect of which no emoluments are paid by the employer, | ||
100 per cent of the employee’s emoluments from that employer in the previous year of assessment;”, | ||
(c) in section 787E, by the insertion of the following subsection after subsection (1): | ||
“(1A) Where an employer makes a contribution to an employee’s PRSA and the total of such contributions exceeds the employer limit, the sum of those contributions made, less the employer limit, shall be chargeable to tax as income of the employee, in accordance with section 118(1).”, | ||
(d) in section 787J— | ||
(i) in subsection (2), by the substitution of “Subject to subsections (2A) and (3)” for “Subject to subsection (3)”, and | ||
(ii) by the insertion of the following subsection after subsection (2): | ||
“(2A) Subsection (2) shall not apply to that portion of an employer’s contributions to an employee’s PRSA that exceeds the employer limit for that employee.”, | ||
(e) in section 787V(1), by the insertion of the following definitions: | ||
“ ‘emoluments’ has the same meaning as in Chapter 4 of Part 42; | ||
‘employer limit’, in relation to a contribution by an employer to an employee’s PEPP, means an amount not exceeding— | ||
(a) 100 per cent of the employee’s emoluments in the year of assessment from that employer, or | ||
(b) where the employee’s emoluments for the year of assessment from that employer are lower than that employee’s emoluments for the previous year of assessment from that employer by virtue of— | ||
(i) receipt of a benefit paid under the Social Welfare Consolidation Act 2005 to which section 126 applies, | ||
(ii) a period of unpaid leave approved by the employer, or | ||
(iii) a period of sick leave at a reduced rate of emoluments or in respect of which no emoluments are paid by the employer, | ||
100 per cent of the employee’s emoluments in the previous year of assessment from that employer;”, | ||
(f) in section 787Z by the insertion of the following subsection after subsection (1): | ||
“(1A) Where an employer makes a contribution to an employee’s PEPP and the total of such contributions exceeds the employer limit, the sum of those contributions made, less the employer limit, shall be chargeable to tax as income of the employee, in accordance with section 118(1).”, | ||
and | ||
(g) in section 787AD— | ||
(i) in subsection (2), by the substitution of “Subject to subsections (2A) and (3)” for “Subject to subsection (3)”, and | ||
(ii) by the insertion of the following subsection after subsection (2): | ||
“(2A) Subsection (2) shall not apply to that portion of an employer’s contributions to an employee’s PEPP that exceeds the employer limit for that employee.”. |