Taxes Consolidation Act 1997 section 485C

Interpretation (Chapter 2A)

Section 485C provides the definitions and interpretive rules for the high earner restriction, which limits the extent to which individuals with adjusted income exceeding €125,000 can use certain tax reliefs to reduce their tax liability.

• Adjusted income is calculated as taxable income plus aggregate specified reliefs used, less any ring-fenced income; an individual may use reliefs of up to the greater of €80,000 or 20% of adjusted income without restriction.
• The income threshold is €125,000 (reduced proportionately where the individual has ring-fenced income and adjusted income is below €400,000); reliefs not subject to restriction are given priority over specified reliefs in all cases.
• Capital allowances carried forward under section 304 or 305 and applied to reduce a balancing charge on the same property are excluded from the restriction, and the corresponding reduction in the charge is ignored when calculating adjusted income.
• Specified reliefs encompass allowances, deductions, set-offs, repayments, and exemptions listed in Schedule 25B; Schedule 25C governs the treatment of reliefs carried forward from 2006.