Budget changes to pension lump sums
Mick: Can you please clarify the status of pension lump sums following the budget and the promises in the Croke Park Agreement?
A limit of €200,000 is being introduced on the amount of tax free retirement lump sums that an individual can draw from all pension arrangements.
The first €375,000 of such lump sums over that limit will be taxed at the standard rate (currently 20pc). Any excess will be taxed at the marginal rate (currently 41pc). Any tax free lump sums that have been taken on or after 7 December 2005 will be aggregated in determining the tax treatment of retirement lump sums paid on or after 1 January 2011.