Tax due on rental property say 5 grand for 2015. Using this as preliminary tax for 2016 means cutting a cheque to the Revenue for 10 grand.
Alternative. Pay the 10 grand into pension AVC and take the deduction against 2015. For ease say the deduction is at 50% so reduces tax for 2015 by 5 grand, ie now no liability. As no liability that is the base for 2016 so no preliminary tax for 2016.
Net result. Pay AVC 10 grand and no tax. Better to have future access to the money in pensions rather than paying tax as the money is gone forever. No net cash impact.
Isn't this a no brainer? What am I missing?
Assume well within pension limits and below value of 2 million pension fund. Appreciate small usc and PRSI to pay plus tax relief at 41% so may end up in small payment situation. But trying to get head around the concept.
Alternative. Pay the 10 grand into pension AVC and take the deduction against 2015. For ease say the deduction is at 50% so reduces tax for 2015 by 5 grand, ie now no liability. As no liability that is the base for 2016 so no preliminary tax for 2016.
Net result. Pay AVC 10 grand and no tax. Better to have future access to the money in pensions rather than paying tax as the money is gone forever. No net cash impact.
Isn't this a no brainer? What am I missing?
Assume well within pension limits and below value of 2 million pension fund. Appreciate small usc and PRSI to pay plus tax relief at 41% so may end up in small payment situation. But trying to get head around the concept.
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