ex-gratia payments

[elacsaplau]

Hi all,

Just a few techie questions on these.

I know that ordinarily there are three ways of calculating the tax free element (i.e. basic, increased & SCSB).

My specific questions relate to ex-gratia payments in the event of illness or death. In this regard,

(a) do the normal rules apply or can tax free payments be made without reference to the various standard formulae (up to €200k)?; and

(b) what is the definition of illness (or injury or disability) that applies in order to qualify for the alternate approach?

Thanks for any info....

 

[JoeRoberts]

There is nothing covering illness as a special treatment for an ex-gratia payment.
If the person is dead, they are no longer in employment so it is not an ex-gratia payment - it is a payment to the estate so outside these rules.

 

[elacsaplau]

There is nothing....

Hi Joe,

The bit I'm trying to understand is section 4.4 of Revenue's guidance note which can be accessed via:

https://www.revenue.ie/en/tax-profe...ains-tax-corporation-tax/part-05/05-05-19.pdf

 

[elacsaplau]

Just bumping this - anyone have any idea what 4.4 means?

 

[dublin67]

4.4 is a separate treatment than your normal termination payments for redundancy/retirement etc. Section 4.4 allows an employer to pay €200K tax free to a person where their office(meaning directorship)/employment ceases on their death. This payment is obvioulsy made to their estate as they will be dead. €200K can be paid tax free and that is it. The same provision allows for a €200K payment on injury or disability.

 

[elacsaplau]

Thanks Dublin67,

Much appreciated.

My specific questions relate to ex-gratia payments in the event of illness or death. In this regard,
(a) do the normal rules apply or can tax free payments be made without reference to the various standard formulae (up to €200k)?; and
(b) what is the definition of illness (or injury or disability) that applies in order to qualify for the alternate approach?

You have answered part (a)……...any idea in relation to (b) or where I could find this out?

Thanks again

 

[dublin67]

The nearest you will get to the Revenue approach will be set out in in the manual that you had link to. This is obviously just the Revenue's definition and the one that they want to put across.