Taxes Consolidation Act 1997 Schedule 3 paragraph 8

Increase of €10,000 on the basic exemption

Schedule 3, paragraph 8 provides for an increase of up to €10,000 in the basic exemption available on an ex-gratia termination payment, where the employee has not claimed relief under section 201 in the previous ten years and has a relevant capital sum of less than €10,000.

• Where the employee has not claimed termination relief in the previous ten years, the basic exemption may be increased by up to €10,000.
• The increase is reduced euro for euro by the amount of the relevant capital sum — that is, the value of any tax-free lump sums the employee has received, will receive, or may receive from a pension scheme.
• If the relevant capital sum is nil (for example, where the employee is not a member of an occupational pension scheme), the full €10,000 increase applies.
• If the relevant capital sum equals or exceeds €10,000, no increase is available and the basic exemption remains unchanged.