Deed of Covenant - 5% of total earning

ArthurMcB

Registered User
Messages
90
Hi,

I have a question on DoC that hopefully someone can help with.

I have checked revenue.ie and citizens information but cant see the answer.

For the 5% of total earnings, is it earnings from prev yr or current yr where you are initially making the deed?

Thanks!
 

torblednam

Registered User
Messages
669
A deed of covenant will be for a fixed sum for a defined period.

Depending on your income across that period, the covenanted sum might be more than 5% of your income in some years, or less than 5% in others.

The tax relief is called at 5% of your total income for each year that you are claiming relief. Looking back a year wouldn't make any sense.
 

ArthurMcB

Registered User
Messages
90
Ok thanks @torblednam

So when you set up the deed, the max you can covenant is 5% of your income in that particular year?

Does this mean that you are better off initiating the deed at year end when you have earned your income for that year? I might be overthinking this...

I had thought that your starting point would be your total earnings in prior year as that figure is known to you. And then claim tax relief in the current year, assuming you maintain that level of earnings.
 

RedOnion

can edit posts
Messages
5,813
So when you set up the deed, the max you can covenant is 5% of your income in that particular year?
No. The covenant can be for as much as you like, but you can only get tax relief up to 5% of your income in any year. So if the covenant is higher than 5% you don't get relief on the excess.
 

ArthurMcB

Registered User
Messages
90
Can the covenantor and the covenantee both submit all required forms to revenue through My Account?
 

ArthurMcB

Registered User
Messages
90
Thanks, I have read the website and i dont think it mentions whether or not the documents may be submitted through My Account.
 

Monbretia

Registered User
Messages
2,019
I did this for years but last time would have been 2018 so unless there has been an update to online it couldn't be done at that stage and the signed docs had to be send in separately and actually the form asked for my Dad's bank details for the refund but they never did it that way even though I filled it and always sent out a cheque!
 
Last edited:

ArthurMcB

Registered User
Messages
90
Sorry....where does one post the forms to?

I tried searching but its confusing. Is it my local tax office?
 

relax carry on

Registered User
Messages
100
Sorry....where does one post the forms to?

I tried searching but its confusing. Is it my local tax office?

There's no such thing as a local tax office anymore. Pop your PPSN in the contact locator to see where your tax affairs are dealt with and post it there.


Alternatively scan the documents as a PDF and send as an attachment in MyEnquiries via your Revenue MyAccount.
 
Last edited:
Top