Redundancy question

the culture of deference

Have a friend who works for one of the banks and is taking VR. We know the rules covering VR here.

Good package offered but the tax implications are large.

Can you avoid all taxes by moving country.

AnthonyCasey

It may be possible to reduce the tax liability on the redundancy payment by moving abroad, but you would similarly reduce the liability by not working for the remainder of the tax year. In both cases you are utilising the post redundancy tax credits that are available.
Of more benefit however may be Top Slicing relief, many people are not aware of this relief which seeks to tax the lump sum at the average rate of tax over the preceding 3 years if it is more beneficial than the rate applying in year of termination.

phormium

You won't get a chance to avoid it as the tax will be deducted from the lump sum before you get it, however the top slicing relief is definitely worth applying for the following year. The tax is not bad if you have long service but I suppose for shorter service it is more onerous.

the culture of deference

Thanks. I just wanted to ask as they will be emigrating after.

Mrs OBumble

It used to be that if you were here for less than 183 days, you weren't tax resident for the year ... so emigrating before July-ish was a smart thing to do.

But the rules have changed


More here: http://www.revenue.ie/en/tax/it/residence.html

AnthonyCasey

No problem @the culture. If they are emigrating they can claim the top slicing relief immediately & do not need to wait until 2013.