Taxes Consolidation Act 1997 section 774

Certain approved schemes: exemptions and reliefs

Section 774 sets out the tax exemptions and reliefs available in respect of exempt approved occupational pension schemes, covering the income tax exemption for scheme investments, the deductibility of employer and employee contributions, age-based limits on employee relief, and the carry-forward of excess contributions.

• Investment income and underwriting commissions of an exempt approved scheme are exempt from income tax, provided a claim is made and Revenue are satisfied the income relates to scheme purposes.
• Employer contributions to the scheme are deductible as a trading expense or expense of management in the chargeable period in which they are paid, with non-ordinary contributions spread over several years at Revenue's discretion.
• Employee contributions are deductible from employment income subject to age-based percentage limits (15% to 40%) applied to the lower of the employee's remuneration and the earnings cap of €115,000, with no relief from PRSI or USC.
• Excess employee contributions that cannot be relieved in a given year due to insufficient remuneration or the percentage cap are carried forward indefinitely until fully relieved.