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Hi Alan,

A client is taking redundancy from her job and has 20 years to go before drawing from her occupational pension.

We’re unsure of the present day value at the date of leaving employment of the tax-free lump sum which may be receivable from the pension scheme in the future. But we believe this will be in excess of €10,000. Can she claim the increased exemption if she is not claiming the tax-free lump sum from her pension scheme for 10 years+?

In the Standard Capital Superannuation Benefit (SCSB) calculation, C is the value of any tax free lump sum received/receivable under an approved pension scheme. Is this the present day value of the tax-free lump sum to be received from her pension scheme in 20 years time?

Thanks,
Niall

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Posted by (Questions: 154, Answers: 11)
Asked on 25 June 2015 4:04 pm
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Niall, You can opt to waive pension lump sum or not – I always work out both and give client option. Re NPV the pension provider should be able to give you this figure. If they do not waive the calculation for increased exemption is: Basic Exemption plus €10,000 minus value of tax free lump sum from pension. Obviously if the NPV is €10,000 then yes there is no difference between basic and increased basic.
Re SCSB the formula is Average Annual Remuneration for 36 months to date of termination x no. of years service / 15 minus value of tax free lump sum from pension.

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Posted by (Questions: 5, Answers: 4811)
Answered on 25 June 2015 4:40 pm