Exemptions relating to retirement payments and benefits

Exemption on retirement payments

Capital Acquisitions Tax (CAT) exemption applies to retirement benefits, redundancy payments or pension payments paid to you by your employer. 

The exemption will not apply to a payment where:

  • you are related to your employer, or your employer is a private company in which you have control
  • the payment is not made under a Revenue approved scheme
  • and
  • Revenue decide that, in the circumstances of the case, the payment is excessive.

CAT is payable on any benefits paid to you by the pension scheme of another person. This is because the benefits are not paid by your employer. 

Exemption on inheritance of retirement benefits

If, following the death of a parent, you inherit part of a retirement fund, you will pay:

  • CAT, but not Income Tax (if you are under 21 years of age)
  • Income Tax, but not CAT (if you are 21 years of age or older).

This CAT exemption applies if you receive an inheritance from a

  • Personal Retirement Savings Account (PRSA)
  • Approved Retirement Fund (ARF)
  • Approved Minimum Retirement Fund (AMRF)
  • Pan-European Personal Pension Product (PEPP).

How to claim the exemption

To claim the Exemption relating to retirement payments and benefits, you need to file a CAT return Form IT38 online. You must file the return through myAccount or Revenue Online Service (ROS).