Frank retired from the civil service in 2020 with a chargeable excess tax liability on public service superannuation benefits of €100,000. The tax can be recovered by reducing his gross pension over a maximum period of:

• A. 5 years
• B. 10 years
• C. 15 years
• D. 20 years

Answer: (D)

When a tax charge arises on public service pension benefits, the excess tax can be recovered by withholding part of the pension each year. The recovery is spread over a fixed period, capped at 20 years. In this scenario, with a €100,000 liability, spreading it over the maximum 20-year window would mean a deduction of €5,000 from the gross pension each year (assuming the pension is large enough to cover it) until the liability is cleared. The 20-year limit is the key point, so the maximum period available for recovery is 20 years.