Pension and Tax

R

Radiowriter

Registered User
Messages
47
Hi,

I currently have a work pension and an PRSA AVC. I contribute monthly to both. For tax purposes, am I better to stick to both pension contributions or divert a larger amount into just the PRSA? I'm about to change jobs so a good time to look at it.

Thanks.
 
There's no difference from a tax perspective. You need to compare the terms and conditions of the main scheme with those of your AVC PRSA.

If you change job, make sure you or your broker reviews your AVC PRSA so that it's still appropriate.
 
Thanks. On my tax credits cert I have allowences for Retirement Annuity Relief and Personal Retirement Savings. I guess the second is the PRSA. I'm worried about loosing the first if I stop the work pension.
 
LDFerguson said:
There's no difference from a tax perspective.
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But with the occupational pension contributions get tax and PRSI relief at source whereas with the "standalone" PRSA you need to claim tax and (only after tax relief has been granted) PRSI relief manually so the latter is a bit more hassle.
 
Hello Radiowriter, a quick question. To get Retirement Annuity Relief and Personal Retirement Savings on your tax credit cert, what did you do to or how did you inform revenue?
 
The occupational pension contributions should be dealt with at source via payroll and should not be reflected on the statement of tax credits!
 
And how do you inform the revenue about the PRSA on the tax credit statement. Send them a copy of a letter from PRSA supplier??
 
To claim tax relief you send them a copy of the PRSA1 certificate from the PRSA provider. Include a brief covering letter explaining why you are sending it and what relief you are looking for. They grant tax relief as a lump sum (for lump sum contributions) or via the statement of tax credits (for ongoing contributions). At the end of the tax year you can then claim PRSI relief manually. The Key Posts cover this.
 
ClubMan said:
But with the occupational pension contributions get tax and PRSI relief at source whereas with the "standalone" PRSA you need to claim tax and (only after tax relief has been granted) PRSI relief manually so the latter is a bit more hassle.
Click to expand...

Very true.

Radiowriter, I think there's something wrong with your tax credits. As Clubman points out, the tax and PRSI relief in respect of your "work pension" should be dealt with by payroll and therefore not appear on your Tax Credits Certificate.

"Retirement Annuity" on a tax credit certificate usually refers to contributions to a Personal Pension Plan. Did you have one of these in the past and perhaps forgot to tell Revenue when you ceased contributions?
 
I hope its ok to piggyback this thread on a related issue. I also hope that this hasnt been covered in the key posts as I have read most but tend to get confused as I go along.

Anyway, the crux of the issue may be a simple yes/no answer. When you reduce your PRSA contribution every month, do you need to inform revenue, or is it done automatically?

Thanks for your time.
 
MHarbour said:
When you reduce your PRSA contribution every month, do you need to inform revenue, or is it done automatically?
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If the contributions are made via payroll and tax/PRSI relief granted at source then the relief will be adjusted automatically. If it is a "standalone" pension then you need to inform Revenue and they will adjust your tax credits.
 
Just piggy backing on this thread,

If in a tax year one contributes €X to a pension, but this is over their age limit (say 20% of the reckonable income), can the surplus (for which tax was still applied) be carried over to the next year.

I ask as sections on Form12 give that impression to me?

Thanks
S.
 
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suzie said:
If in a tax year one contributes €X to a pension, but this is over their age limit (say 20% of the reckonable income), can the surplus (for which tax was still applied) be carried over to the next year.
Click to expand...

Yes, and if the limit for tax relief has been exceeded by a large amount (say you put in 45% when the appropriate limit was 20%) the excess can be carried forward into a number of future years until it is used up.
 
Hi Liam,

can the reverse be done. ie take excess contributes in 2009 and apply them to your 2008 contributions?

Thanks

S.
 
If you have paid excess in 2009, then you can backdate to 2008, as long as you claim this by 31/10/2009 (or 17/11/2009 for ROS) and do not exceed the amount allowed for 2008.

On the PRSAs - one thing that you need to bear in mind is that if your employer contributes to the PRSA, then this is part of your overall relief allowed - for example if you are under 30 and your employer pays 5%, you can only pay 10%. Whereas in an occupational scheme, your allowance would be 15% overall.
 
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