This is the scenario.
60-yr old teacher with 38/40 years service.
Paying 6.5% superannuation pension and a small % AVC with Cornmarket, let's assume 10% of salary total.
Would it be possible to do the following:
So the PRSA AVC plan would have a very short life, say 1-2yrs, with premium contributions of 30k-40k.
- start a PRSA AVC
- put in 30% of 2007 earnings as a lump-sum, to use up all 40% tax relief
- and then continue to put in up to 30% of earnings in 2008
- retire in Augustv 2008 or 2009
The main aim of this plan is to take advantage of substantial tax relief.
Can anybody see any problems?
One more question: he will receive 38 *(3/80) = 114/80 of final salary as a gratuity (tax-free lump-sum). How much of the accumulated PRSA AVC can he take tax free?
However, if the teacher has any additional earnings from the school (paid privately) for extra work like looking after sports or whatever, can 1.5 times the total of those earnings be taken tax-free in addition?
Assuming the teacher is paid by the Department of Education, the superannuation scheme will provide 114/80s of his/her Department salary which can be topped up with the 6/80s tax-free from the PRSA AVC. That's clear enough.
However, if the teacher has any additional earnings from the school (paid privately) for extra work like looking after sports or whatever, can 1.5 times the total of those earnings be taken tax-free in addition?
I guess the question I'm asking is as follows: 'Does a PRSA potentially provide retirement benefits for income from a number of sources simultaneously?'
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?