Taxes Consolidation Act 1997 section 513

Capital receipts in respect of scheme shares

Section 513 imposes an income tax charge on capital receipts arising in respect of a participant's shares in an Approved Profit Sharing Scheme (APSS) before the release date.

• Where trustees or a participant become entitled before the release date to receive money or money's worth (a "capital receipt") in respect of a participant's shares, the participant is charged to income tax for the year in which the entitlement arises on the appropriate percentage of the receipt's amount or value.
• Money or money's worth is not a capital receipt to the extent that it already constitutes income of the recipient, consists of proceeds from a disposal of scheme shares under section 512, or consists of new shares issued under a company reconstruction or amalgamation within section 514; proceeds from a partial disposal of rights issue entitlements that are reinvested in exercising other such rights are also excluded.
• If the capital receipt exceeds the locked-in value of the shares immediately before the entitlement arose, the income tax charge is restricted to the appropriate percentage of that locked-in value; after each charge, the locked-in value is reduced by the amount charged.
• No income tax charge arises on a capital receipt where the entitlement arose after the participant's death, or where the amount or value of the receipt (after any reduction to the locked-in value) does not exceed €13.