Revenue eBrief No. 063/23

15 March 2023

Pensions Manual amended

A number of updates have been made to the Pensions Manuals following review and to reflect amendments in Finance Act 2022. The main changes are highlighted below.

Chapter 7 - Lump sum benefits and commutation

• This chapter has been updated to include a reference to Pan-European Personal Pension Products (PEPPs) in the context of commuting a pension within “trivial limits”.

Chapter 10 – Benefits on death-in-service

• This chapter has been updated in section 2 regarding Capital Acquisitions Tax where an individual dies in service and the equivalent pension value is transferred to an Approved Retirement Fund (ARF).

Chapter 13 - Transfer Payments

• Section 2 has been updated to provide clarity on availability of transfer payments to a PEPP.  It also provides a link to a new Chapter 31.

Chapter 17 - Overseas Employers, Overseas Employees and Employees Seconded from Overseas

• Section 3 has been updated to state that the section only applies to overseas employment contracts and includes an example clarifying the tax treatment of employees seconded from outside Ireland.  It also removes guidance for seconded employees staying more than five years requiring Revenue’s written permission.
• Section 5 has been updated to include guidance that the treatment as set out in this section applies to both Irish and non-Irish employment contracts.
• Section 6 has been updated to state that, in certain circumstances, a non-resident employee may remain in an Irish occupational pension scheme.
• Section 7 is updated to provide clarity for overseas employees of Irish employers.
• Section 8 has been updated to state that an employee on secondment from an Irish employer for up to five years can be deemed to remain on the payroll.
• Section 10 has been updated to include a reference to PEPPs.

 Chapter 23 – Approved Retirement Benefits

• This Chapter has been updated to include references to PEPPs.
• Section 4, the specified income requirement, has been removed following the abolition of the Approved Minimum Retirement Fund (AMRF) in Finance Act 2021.
• Section 5, the AMRF, has been updated to include guidance on the previous treatment of this product.
• Section 8 has been updated with new contact details for Qualified Fund Managers advising Revenue of the intention to act as a QFM.
• Section 9 has been updated regarding Capital Acquisitions Tax where an individual dies in service and the equivalent pension value is transferred to an ARF.

 Chapter 24 – Personal Retirement Savings Accounts (PRSAs)

• Section 24.2 has updated examples and includes a reference to PEPP. 
• A new section 24.3 is added which clarifies the position regarding employer contributions to a PRSA, following changes in Finance Act 2022.
• Section 24.7 has been updated to include details on the interaction of PEPP products with a PRSA.
• Section 24.9 updates details of transfers from PRSAs to other pension products.
• Section 24.14 includes a link to the new Chapter 31 - PEPPs.

 Chapter 25 – Limit on Tax Relieved Pension Funds

• Section 4 has been amended:
  • To update the circumstances in which a benefit crystallisation event (BCE) is deemed to occur to include cases where the assets are retained in a PEPP rather than transferred to an ARF,
  • To include information on vested PEPPs,
  • To include PEPPs within the definition of a “relevant pension arrangement”.
• Section 5 has been updated to include the circumstances in which the holder of a PEPP must provide the PEPP provider/administrator with a declaration relating to BCE.
• The BCE Declaration example within the appendix section has also been updated to allow for declarations relating to a PEPP.

Chapter 27 - Taxation of retirement lump sums

• Section 3 has been updated to include a lump sum from a PEPP as a lump sum arrangement.
• A link has been added to TDM Part 07-01-09A which deals with Lump sums from a foreign pension under section 200A TCA 1997.[MD1]
• A new section 10 has been inserted to provide information on lump sums paid from a PEPP.
• Section 15 has been updated to provide details on amendments to the new section 200A TCA, which deals with the treatment of lump sums from foreign pension arrangements.
• Footnote 2 has been updated to include the UK as a country from which an individual can claim migrant member relief on a pre-existing pension arrangement.

 Chapter 31 – Pan European Pension Products (PEPPs)

A new Chapter 31 has been inserted into the Pension Manual which provides guidance relating to the taxation of Pan-European Pension Products (PEPP) in Ireland.

 The topics covered in this Chapter are: tax relief, PRSI and USC, benefits on retirement, death benefits, interaction with other pension arrangements, vested PEPPs, transfers between PEPPs and other pension products, Migrant Member Relief and PEPP sub-accounts, imputed distributions, non-residents and vested PEPPs, anti-avoidance, Pension Adjustment Orders, retirement benefits not taken on or before age 75 and non-established PEPP providers.