Taxes Consolidation Act 1997 section 787AA

Taxation of payments from a PEPP

Section 787AA provides that payments from a pan-European pension product (PEPP) are subject to PAYE, and sets out the circumstances in which assets are treated as having been made available, the exemptions from the charge, and the obligations of non-resident PEPP providers.

• Any assets a PEPP provider makes available to a PEPP saver, beneficiary or other person — including an annuity purchased from PEPP assets — are treated as emoluments subject to PAYE, with tax deducted at the higher rate unless the provider has received a revenue payroll notification from Revenue.
• The charge does not apply to a tax-free lump sum of up to 25% of fund value, transfers to an ARF, amounts paid to personal representatives on death, amounts used to discharge tax liabilities, or amounts applied to reimburse chargeable excess tax.
• Assets are treated as made available where a relevant payment is made, assets cease to be PEPP assets or cease to be beneficially owned by the saver, an annuity is paid from the fund, or PEPP assets are used in a transaction that would give rise to a distribution if they were ARF assets.
• A non-resident PEPP provider must either enter into an enforceable contract with Revenue or appoint a State-resident agent to discharge all duties and obligations under the PEPP regime.