top slicing relief

[kildon]

The formula for calculating this relief is:
Taxable lump sum X (tax rate applied to lump sum - average taxrate for previous 3 years)

is the tax rate above your marginal tax plus any income levies due? in my case this would be 41% plus 6% income levy...so, 47% in total

for calculating average tax rate over last 3 years...is it simple the average of the tax rate paid in each year, so say 20%, 30% and 40%, then ave rate is 30%?

 

[allthedoyles]

Forget levies / PRSI - they just don't apply - This is based on PAYE income tax only - here is an example

Example:
Year earnings incomeTax paid
2009 €40,000 €13,000
2008 €38,000 €12,000
2007 €36,000 €11,000

Total €114,000 €36,000

Average tax rate is €36,000 ÷ €114,000 x 100 = 31.6%

 

[kildon]

thanks