dangerhere
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What restrictions if any are in place to stop someone putting in their full percentage allowable into their pension at the high rate and in addition claiming the SSIA exemption of 2500 for 7500 Euro?
Tax relief and pension incentive
Q. Can I as an income earner claim tax relief for the SSIA funds I am investing into a pension under this scheme?
A. Tax relief can be claimed for SSIA amounts invested in excess of €7500. It is not possible to claim any tax relief for amounts up to and including €7500 as these attract a tax credit top-up.
Q. I am currently claiming the maximum amount of tax relief for my pension in relation to my age in the year my SSIA matures. Can I avail of the pension incentive scheme?
A. Yes, the SSIA pensions incentive scheme is treated separately from the way in which tax is claimed under normal rules. Where the maximum age relief is being claimed and your earnings do not exceed €50,000 you are permitted to re-invest €7,500 of your SSIA funds. However you are not eligible for tax relief on this amount.
But even high rate taxpayers who are already maximising their annual relief can surely benefit from this and there are still many people on 20% who can also benefit?If you can gain relief at the marginal rate this is a better financial option than SSIA to Pension transfer in any event (hence the criticism of the "incentive" / poor take-up)- wait until next year / backdate contribution to last year?
What do you mean by this? Do you mean that if their pension income is such that they will pay high rate tax on it...? Don't forget about the 25% tax free lump sum that they can take.BUT if they are funding an income in retirement that will cause them to suffer marginal rate tax