Pension contribution of company treated as benefit in kind

[Brouhahaha]

Hi,

I would appreciate some help figuring out if the tax on this is correct:

Last October I started a pension before the deadline for return of 2004 Form 12s with Quinn Life. I work as a contractor with my own limited company so started an executive pension. I contributed 10k from my own funds so thought I would be able to claim back 42% from tax paid. However QL said as it's an executive pension at least 1/7th of the contribution must come from my company so I designated it as 1666 from the company and 8334 from my own funds. The 1666 I then reimbursed from the company to myself.

Revenue are telling me that 1666 should be taxed as benefit in kind. Is this correct, i.e. if a company contributes to a pension you are taxed on this? This will reduce my tax back to 42% of 8334. This doesn't square with my understanding that the company can make contributions to the pension on my behalf tax-free.

Thanks

 

[capall]

Interested to know did you ever get advice on this.

My understanding is that there would be no BIK implication.

Sometimes when dealing with the revenue the level of knowledge of the person you are dealing with can vary.

 

[Guest126]

Definitely not - a company contribution is fully allowable (once the salary is high enough?) and is not a BIK.

 

[capall]

Just seen on the Quinn website

If its a personal pension scheme and the employer contributes on your behalf then it is BIK for the employee,then the employee claims relief of the income tax as if they had paid the premiums themselves

Obviously if you have your own company this would not be the pension to take out as you are subject then to the same limits as any PAYE worker.
Whereas if the company takes out the pension plan the company can contribute whatever they want from company profits.

I would imagine in this scenario you make no personal contribution as administratively it is easier to make the contribution directly from the company before its year end and then obviously you will be taking a lower salary.

The executive pension from Quinn Life would not be a personal pension.

 

[Guest126]

An Exec pension is a company (rather than personal) pension - so you should not have had any problems getting the contributions from company into it.

 

[F. Kruger]

Hi,

The 1666 I then reimbursed from the company to myself.

Why did you do this?

Sorry. I just read the OP again.

I think that you or your accountant needs to the Revenue proof that the original €10K came from your own personal funds and that the withdrawal compensation for money that you had already paid.