Redundancy SCSB Query

J

JoeRoberts

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A basic exemption and an increase for SCSB, are generally available against any subsequent lump sum payment, subject to the €200,000 lifetime limit from a different employer. However, they can only be given once against a lump sum from the same employer or an associated employer.

Above is direct from Revenue website.
My query is if someone had a previous termination payment from same employer and made use of the basic and increased exemption at that time, but not the SCSB, is the SCSB available for a second termination payment from same employer.
 
I don't see anything that would prohibit it but what I would query is the length of service?

[broken link removed]

If you were made redundant after 5 years service and used the increased basic exemption and returned to that job and now are being made redundant again after 10 years. I'd imagine that the service is 10 years rather than 15.
 
Thanks Joe, I understand also that service could not be combined, no query on that element.
Just wondering would Revenue consider the exemptions as a "set" when they use the word "they can only.."

And I also find it strange that employer is required to get Revenue approval for the 10k increased exemption but not for the SCSB which can be multiples in value compared to the 10k...
 
You don't have to get pre approval any more. The logic I'd imagine was that €20k of tax free income can be generated in short periods of time.

It takes much longer to generate large tax free lumps sums under SCSB. The TFLS is now deductible from the SCSB and increased exemption.
 
If the tax free lump sum option from pension is waived, is there still an option open to have the balance between 200k and 500k taxed at 20% at retirement ? Or is that lost with the waiver ?
 
I've been looking into this again as to whether service for 2 periods can be combined for the scsb.
I came across this and wonder if I am reading it correctly

https://www.charteredaccountants.ie/taxsource/1997/en/act/pub/0039/nfg/sched3-nfg.html

Where more than one payment is made in respect of the same office or employment or in respect of different offices or employments held under the same or associated employers, all such payments are aggregated and, where made in respect of different employments, the SCSB in respect of the various employments are likewise aggregated. This ensures that only one basic exemption is obtained in such circumstances.

par 7(b) The calculation of the SCSB might give different amounts at the dates of different events. A double allowance of any part of the SCSB is prevented and the amount to be taken into account is the highest of the amounts.

This indicates to me that service can be combined which would be logical as pensionable service is combined when calculating the lump sum PV that reduces the scsb.
And presumably both lump sums would be aggregated but would there be a deduction for the previous tax paid ?
 
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