Question relating to redundancy and taxes

Heebie

Theoretically,

Company B is owned by parent company, A.

A person is employed by Company B.

Company B is effecctively sold to Company C. (business/customers and assets)

In order to complete the transaction, employees and assets of company B, are shifted (on paper) to company A, then immediately to company C. So, employee works for company C.

Company C makes said employee redundant after a relatively short period agreed upon in writing by company A (the seller of company , company C (the buyer of company and the employee.

Company A wishes said employee to take a newly created position at company A that carries some functions that employee was performing within company B on behalf of company A previous to the sale of company B.

Should this affect the tax-exempt status of employee's redundancy payment from company C?

Paulw

Not that I'm aware of, since the tax exemption comes from the state, and not from the company, per se. You might get a quick answer if you contact the Revenue.

Heebie

The tax exempt status of the payment only applies in particular circumstances (usually the majority of circumstances.) If someone gets made redundant, then takes basically the same job with the same company, they're ineligible for the tax exemption. This circumstance appears to be quite unusual, and different solicitors have given different counsel in relation to it. Trying to get another opinion without spending yet another €300.
Revenue is probably a good resource, I suppose.

Paulw wrote: »

Not that I'm aware of, since the tax exemption comes from the state, and not from the company, per se. You might get a quick answer if you contact the Revenue.

Mr. Incognito

It might if TUPE applied from B to C and back which was probably the reason for the redundancy.

Heebie

TUPE did apply to both transfers.

Mr. Incognito wrote: »

It might if TUPE applied from B to C and back which was probably the reason for the redundancy.