200A. Lump sums from foreign pension arrangements

(1)(a) In this section—

“administrator”, in relation to a foreign pension arrangement, means the person or persons having the management of the foreign pension arrangement;

“domestic lump sum” means a lump sum referred to in paragraph (b) of subsection (1) of section 790AA construed in accordance with paragraph (c) of that subsection;

“excess lump sum” shall be construed in accordance with paragraph (d);

“foreign pension arrangement” means a contract, an agreement, a series of agreements, a trust deed or other arrangement, other than a state social security scheme, which—

(a) is established in, or entered into under the law of, a territory other than the State,

(b) is, in good faith, established for the sole purpose of providing benefits of a kind similar to those referred to in Chapter 1, 2, 2A or 2D of Part 30, and

(c) is not a relevant pension arrangement;

“relevant pension arrangement” has the same meaning as it has in section 790AA;

“specified date” means 1 January 2023;

“standard chargeable amount” has the same meaning as it has in section 790AA;

“standard rate” means the standard rate of income tax in force at the time the foreign lump sum is paid;

“tax free amount” has the same meaning as it has in section 790AA;

“tax year” means a year of assessment within the meaning of the Tax Acts.

(b) For the purposes of this section, a reference to a foreign lump sum is a reference to a lump sum that is paid to an individual under the rules of a foreign pension arrangement by means of commutation of part of a pension or of part of an annuity or otherwise.

(c) For the purposes of this section, references to a foreign lump sum that is paid to an individual include references to a foreign lump sum that is obtained by, given to, or made available to, an individual and references to a foreign lump sum which was or had been paid to an individual shall be construed accordingly.

(d) For the purposes of this section, the excess lump sum, if any, in respect of a foreign lump sum that is paid to an individual on or after the specified date (in this paragraph referred to as the “current foreign lump sum”) shall be—

(i) where, before the current foreign lump sum was paid, there had not been paid to the individual—

(I) a domestic lump sum, or

(II) another foreign lump sum on or after the specified date,

the amount by which the current foreign lump sum exceeds the tax free amount, and

(ii) where, before the current foreign lump sum was paid, there had been paid to the individual one or more than one—

(I) domestic lump sum, or

(II) other foreign lump sum on or after the specified date, (in this section referred to as the “earlier lump sums”), then—

(A) where the amount of the earlier lump sums is less than the tax free amount, the amount by which the aggregate of the amounts of the earlier lump sums and the current foreign lump sum exceeds the tax free amount, and

(B) where the amount of the earlier lump sums is equal to or greater than the tax free amount, the amount of the current foreign lump sum.

(2) Where a foreign lump sum is, on or after the specified date, paid to an individual who is resident in the State at the time the lump sum is paid, the excess lump sum in respect of that foreign lump sum shall be regarded as income of the individual for the tax year in which that foreign lump sum is paid and shall be chargeable to income tax and the universal social charge in accordance with subsection (3).

(3) Subject to subsection (5)—

(a) where the excess lump sum arises in accordance with subsection (d)(i), (1)(d)(ii)(A) or (1)(d)(ii)(B) (in so far as the amount of the earlier lump sums referred to in subsection (1)(d)(ii)(B) is equal to the tax free amount), then—

(i) so much of the excess lump sum as does not exceed the standard chargeable amount shall be charged to income tax under Case III of Schedule D at the standard rate, and

(ii) so much of the excess lump sum, if any, as exceeds the standard chargeable amount shall be—

(I) charged to income tax under Case III of Schedule D at the higher rate for the tax year in which the lump sum is paid, and

(II) regarded as relevant income for the purposes of Part 18D,

(b) Where the excess lump sum arises in accordance with subsection (1)(d)(ii)(B) (in so far as the amount of the earlier lump sums referred to in that subsection is greater than the tax free amount), then where the amount by which the earlier lump sums is greater than the tax free amount (in this paragraph referred to as the “first-mentioned amount”) is less than the standard chargeable amount—

(i) so much of the excess lump sum as does not exceed an amount equivalent to the difference between the standard chargeable amount and the first-mentioned amount shall be charged to income tax under Case III of Schedule D at the standard rate, and

(ii) so much of the excess lump sum, if any, as exceeds an amount equivalent to the difference between the standard chargeable amount and the first-mentioned amount shall be—

(I) charged to income tax under Case III of Schedule D at the higher rate for the tax year in which the lump sum is paid, and

(II) regarded as relevant income for the purposes of Part 18D.

(4) Where a foreign lump sum is paid to an individual on or after the specified date, the person liable for income tax and universal social charge charged in accordance with subsection (3) shall be that individual.

(5) In so far as any part of an excess lump sum is to be regarded as income of an individual for a tax year and charged to income tax at the standard rate in accordance with paragraph (a)(i) or (b)(i) of subsection (3)—

(a) such income—

(i) shall not be reckoned in computing total income for the purposes of the Tax Acts, and

(ii) shall be computed without regard to any amount deductible from, or deductible in computing, income for the purposes of the Tax Acts,

(b) the charging of that income in such manner shall be without any relief or reduction specified in the Table to section 458 or any other deduction from that income, and

(c) section 188 shall not apply as regards income so charged.

(6) The provisions of the Income Tax Acts relating to—

(a) assessments to income tax, and

(b) the collection and recovery of income tax,

shall, in so far as they are applicable, apply to the assessment, collection and recovery of income tax and universal social charge under this section.

(7) An individual claiming relief under this section shall obtain from the administrator of the foreign pension arrangement and provide to the Revenue Commissioners in such form and manner as the Revenue Commissioners may specify—

(a) such evidence as the Revenue Commissioners may reasonably require in relation to the foreign pension arrangement, including for the purpose of satisfying themselves that the requirements set out in paragraphs (a) to (c) of the definition of “foreign pension arrangement” in subsection (1)(a) are met, and

(b) without prejudice to the generality of paragraph (a)—

(i) the name and address of the administrator of the foreign pension arrangement,

(ii) the date on which the individual became a member of the foreign pension arrangement, and

(iii) the date or dates on which a foreign lump sum or foreign lump sums under the foreign pension arrangement became or become payable.

(8) A person aggrieved by an assessment made on that person under this section may appeal the assessment to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the notice of assessment.

(9) This section shall not apply to a foreign lump sum that is paid to—

(a) a widow or widower,

(b) a surviving civil partner,

(c) children,

(d) dependents,

(e) personal representatives, or

(f) children of the civil partner,

of a deceased individual.