# Pension tax relief question



## laragh (12 Feb 2008)

I started a pension at the end of October last year. I am a PAYE worker. I decided to make a lump sum payment to get the pension started and then contribute monthly to it.
I'm a bit confused as to how I getr my tax relief on these contributions!!

For the lump sum I expected that I would get a refund of tax paid from 2006 but so far no juicy cheque from Revenue has arrived.
I also expected to see some sort of tax credit included on my statement of tax credits but it came in the post the other day and no mention of any pension relief on it.

How exactly is the relief on lump sum and these monthly contributions given?
This may have all been explained to me by my broker but it either went over my head or I have forgotten what was said.


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## John Rambo (12 Feb 2008)

If it's done through payroll, your employer takes care of it.If you're doing it yourself you have to claim the relief yourself.


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## ClubMan (12 Feb 2008)

Did you not put in a claim for the tax relief on the lump sum contribution against 2006 income? It doesn't happen automatically! You have to write to Revenue with details of your contribution (e.g. copy of the _PRSA1 _cert or _Retirement Annuity Contract_) and telling them that you want to set it against 2006 income in this case. You also have to claim _PRSI _relief separately once you get tax relief. See the key posts on both issues. Unfortunately if you did submit the tax claim before the end of October then you may have missed out on claiming tax relief in respect of 2006 income. _Revenue _used to allow the claim to go in later than this but some people have reported that you now need to make the contribution *AND *put the claim in before the end of October. If you have missed this opportunity then you can only claim against 2007 income. If the contribution is below your age related tax relief limit then can get full tax (20% or 41% depending on what you pay) and maybe full _PRSI _(4%) and health contribution (2%) relief separately.


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## ClubMan (12 Feb 2008)

Just to clarify - I was assuming that you were making contributions to a _PRSA _or personal pension plan from net income. _JR _is assuming that you are making contributions to a _PRSA _or occupational pension scheme via payroll in which case tax and _PRSI_ relief will be at source (except where you want to set the pre October 31st 2007 lump sum contribution against 2006 income).


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## laragh (13 Feb 2008)

Thanks JR & Clubman,

Yes it's a personal pension plan and the payments into it are not handled through payroll.

I made the lump sum contribution on 14th November and I was led to believe that this was still in time to allow claiming relief against 2006 tax paid. Will have to double check with the broker!!

How do I go about claiming relief on the monthly contributions? Do I have to make a return? My husband is self-employed so will be making a return- can he claim the relief? Am I right in thinking that I'll have to wait until the end of the year before I get any relief on this


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## LDFerguson (13 Feb 2008)

laragh said:


> I made the lump sum contribution on 14th November and I was led to believe that this was still in time to allow claiming relief against 2006 tax paid. Will have to double check with the broker!!


 
Strictly speaking, the deadline is the 31/10/2007, but if you file an online tax return using www.ros.ie this gets extended to mid-November.  But it appears you didn't submit a tax return or claim your relief.  

I'd suggest you submit a claim now.



laragh said:


> How do I go about claiming relief on the monthly contributions? Do I have to make a return? My husband is self-employed so will be making a return- can he claim the relief? Am I right in thinking that I'll have to wait until the end of the year before I get any relief on this


 
Send the RAC certificate (part of your policy documentation) to your local Inspector of Taxes with a note of your date of birth and PPS number.  Your relief on the monthly contribution will probably be grated as an increase to your tax credits.  Your husband cannot claim your tax relief.  You can claim your tax relief immediately but have to wait until the end of the tax year (and after your tax relief has been granted) to claim back the PRSI separately.


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## ClubMan (13 Feb 2008)

As _Liam _says - for the lump sum you can try writing to _Revenue _with (a copy of?) the _RAC _(for a personal pension plan) or _PRSA1 _(for a _PRSA_) certificate and explaining that you would like to claim tax relief on the lump sum against 2006 income. This may not be possible at this stage in which case you can claim it against 2007 income assuming that you have not "used up" that relief. You can also explain that you are making ongoing contributions from November (?) 2007 and would like to claim a tax credit in respect of these. You should then get a lump sum refund in respect of the lump sum relief and then an adjusted statement of tax credits for ongoing contributions. Once you have claimed tax relief you can claim _PRSI _relief as per the link in the key posts thread.


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## laragh (13 Feb 2008)

Thanks for that!

I'll get onto the Revenue straight away! I suppose the chances are slim that I'll get any relief for 2006 given that the lump sum was paid after 31st October. Would be nice to get the relief on a monthly basis through increased credits- would help with the cash flow.


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## ClubMan (13 Feb 2008)

laragh said:


> Would be nice to get the relief on a monthly basis through increased credits- would help with the cash flow.


That should not be a problem. They should adjust your tax credits to allow for regular contributions from net income. You'll still have to claim _PRSI _relief manually at the year end.


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## LDFerguson (13 Feb 2008)

laragh said:


> Thanks for that!
> 
> I'll get onto the Revenue straight away! I suppose the chances are slim that I'll get any relief for 2006 given that the lump sum was paid after 31st October. Would be nice to get the relief on a monthly basis through increased credits- would help with the cash flow.


 
Don't forget that even if Revenue turn down your application for tax relief against the 2006 year, that doesn't mean to say you've lost all relief on that contribution.  You simply claim it against 2007.  If it, combined with your monthly contributions, brings you over your maximum limit for tax relief, you'll still get relief carried over into 2008.


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