Taxes Consolidation Act 1997 Schedule 3, paragraph 2

Basic exemption

Schedule 3, paragraph 2 defines what constitutes a termination payment for the purposes of the Schedule and sets out the basic exemption available on ex-gratia lump sum payments.

• A termination payment under section 123 means the payment after deducting the basic exemption of €10,160 plus €765 for each complete year of service.
• The €765 per year relief cannot be apportioned for partial years of service.
• Breaks in service are excluded when calculating complete years, but total service before and after a break is combined.
• Where a severance payment relates to employment across group companies, years of service in those companies may be aggregated.