Personal retirement bond and tax

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Pixie50

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Hi
I have a Prb with Irish life it's just under 25k and I am thinking of cashing it in at 5O . Am I liable to pay tax on the full amount .does anyone know.

Thanks in advance
 
I think you can take 25% tax free and encash the balance at 10% tax (under triviality rules).
 
I can cash it in as far as I am aware but u sure of what portion is liable for tax
 
Are you sure you can cash it in?

Two methods of availing of the trivial pension rules. One is where the pension would be less than €330 per year. At 50 a fund of €18,750 (after withdrawing the 25% lump sum) would give you a bigger pension than this. The other method is if ALL your pension funds (including other ones from other employments) have a value of less than €30,000. Would this be your situation?

If you're eligible for the €30,000 trivial rule, then the first 25% of your fund is tax-free and the other 75% is taxed as income, so normal tax, PRSI and USC will apply and the rates will depend on your other income in the tax year.

With a PRB there's an alternative method of calculating your tax-free lump sum, based on your salary and service in the job from where it accumulated. Occasionally this calculation can result in a figure that's greater than 25% of the fund, even up to 100% of the fund in rare circumstances. Your advisor should run this calculation for you before you make up your mind which option to choose.
 
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Reactions: mtk
If you don’t need the money, i’d leave it where it is, as its presumably growing, has low ongoing costs, and unless you have a specific purpose in mind, its just going to be sitting in a bank account, losing value overtime, with inflation, and possibly bank charges as well.

I understand its also an option, to transfer a PRB into an occupational scheme, which may have even lower ongoing charges.
 
you could check the salary service lump sum to see would that give you a better lump sum.

Would a pension annuity for a 50 year old be greater than circa 2%?
 
moneymakeover said:
Can you cash in entire amount or just 25%?
Click to expand...
Hi
I can cash in 25% tax free the remaining 75% i am unsure if i can cash it in and pay the tax on it.. i do have a public sector pension i pay into and have 18 years service to date. looking for any advice anyone can offer thanks in advance
 
Pixie50 said:
Hi
I can cash in 25% tax free the remaining 75% i am unsure if i can cash it in and pay the tax on it.. i do have a public sector pension i pay into and have 18 years service to date. looking for any advice anyone can offer thanks in advance
Click to expand...

I don't think you'll be allowed to cash in the remaining 75% in one go, under trivial pension rules. See my post #5 above.

You'll need to ask your broker or whoever set up the PRB for you to calculate if you can get more than 25% out as a tax-free lump sum, using a calculation involving your salary and service in the job that generated the PRB fund.
 
 
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