Revenue eBrief No. 227/22
23 December 2022
Payments on Termination of an Office or Employment or Removal from an Office or Employment
Tax and Duty Manual Part 05-05-19 - Payments on Termination of an Office or Employment or Removal from an Office or Employment has been updated as follows:
- The layout has been amended to follow the structure of the legislation.
- Paragraph’s 2.1 and 5 have been updated to clarify that termination payments received on or after 1 January 2018 are taxed on the receipts basis.
- Paragraph 2.3 has been updated to outline that redundancy will generally not be regarded as taking place where following termination, an employee commences work with another company within the same group.
- Paragraph 3 has been updated to outline the tax exemptions that apply to the Covid-19 Related Layoff Payment and the Covid-19 Death in Service Payment, which were introduced by Finance Act 2022.
- Paragraph 4.6 has been added to provide detail on the Relevant Capital Sum.
- Paragraph 4.7 has been added to provide detail on the interaction of Covid Supports with the exemptions offered by section 201 and Schedule 3 TCA 1997.
- Paragraph 5 has been updated to clarify that where an employment contract provides for payment in lieu of notice, the payment is taxable as pay and the exemptions offered by section 201 and Schedule 3 TCA 1997 do not apply.
- References to Foreign Service Relief have been removed, as it ceased to have effect from 7 March 2013.
- References to Top Slicing Relief have been removed as it ceased to have effect from 1 January 2014.