Tax Relief

What is tax relief?

Tax relief is now the last remaining tax incentive you will receive from the Irish Government. It is a payment made by the government each month when a person contributes money into a pension. We believe the system is a litle unfair in that the higher earners get better tax treatment over the lower paid, we believe the Government may introduce a 33.33% tax relief for all instead of the 40% and 20% currently (October 2016).

Depending on who is paying the money and if they are self employed, employees etc, business owners tax is dealt with differently.

PAYE employees and Sole Traders:

The amount of money you pay in is limited by your age and what you earn each year, see below table.

TABLE OF AGE AND % OF INCOME YOU CAN PAY INTO A PENSION

Aged

Less than 30

30 to 39

40 to 49

50 to 54

55 to 59

60+

Tax relief limit

15%

20%

25%

30%

35%

40%

Example: John is earning €90,000 a year and is aged 55 years. Because John is between 55 and 59 years of age, he can claim tax relief on a maximum of 35% of his annual income, so if he earns €90,000 a year, he can make pension payments up to 35% a year (€31,500), so this is the amount he can pay in that year and claim tax relief on. He can pay in more but he will not recieve tax relief.

Company Directors (Proprietors):

If you own your own business and it is profitable, this is a great way to reduce your tax bill and transfer wealth tax free to you. As a limited company owner you are not limited to the above tax relief limits. So you should be using your business to contribute to a pension for your exit and ultimately to make you financially independant of your business. Pension planning is particularly important to business owners.

For further information contact us on 01 8027670 to arrange a meeting.

WARNING: The value of your investment may go down as well as up. You may get back less than you invest.

WARNING: Past performance is not a reliable guide to future performance.

WARNING: These funds may be affected by changes in currency exchange rates.