Finance Bill 2022: unlimited employer contributions to PRSAs permitted from 2023?

[ClubMan]

Okay, my mistake, 10m then.

But I thought the maximum SFT is about 2m, so how can an employer make a 10m contribution to one employee's pension fund?

The SFT doesn't prevent such a contribution. It simply dictates the level at which chargeable excess tax will apply. And the SFT is increasing by €200K p.a. between 2026 and 2028 at which point it will be €2.8M.

Chargeable excess tax

This page describes chargeable excess tax

www.revenue.ie

Plans for Standard Fund Threshold to rise to €2.8m

The Government has announced plans to increase the amount of money high earners can have in their pension pot without facing a significant tax bill.

www.rte.ie

 

[Gordon Gekko]

T

Okay, my mistake, 10m then.

But I thought the maximum SFT is about 2m, so how can an employer make a 10m contribution to one employee's pension fund?

They could do €1bn if they liked. But what’s the point? Unless someone was terminally ill.

 

[tropez3]

I hope the problem was eejits creating fake employments for their spouses or children and their companies then they making huge PRSA contributions.

Versus, say, people just organising big contributions generally and Revenue not liking that.

I just came across this story on RTÉ. I’m curious what action Revenue might take in these cases. Could they prevent companies from deducting excessive PRSA contributions from their corporate tax bills, as outlined in the income tax manual regarding bona fide payments and excessive remuneration? Or might they target individuals under Section 811 for avoided BIK?

 

[ClubMan]

Couldn't they do both?