Bonus into AVC no current provider

C

Chewbacca

Registered User
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I've heard that I will get a bonus but don't presently have either an existing external pension and am not a member of employers scheme. I dont' envisage staying with existing employer for another 2 years and they offer a match of employee contribution. I can only join employers scheme in a few months.

If I started my own external pension could I ask employer to pay bonus to that as an AVC and avoid the tax? I'm assuming if I was in employers scheme that I could ask for this to paid into scheme as an AVC? If I left the employer scheme in say 6 months could I transfer the amount in that scheme to a new external pension and keep the tax relief on my own contributions and bonus contribution, I'd assume that the employer contribution would be clawed back?
 
GSheehy said:
Was there a prior entitlement under your contract of employment to the bonus?

Gerard

www.prsa.ie
Click to expand...
Hi, yes bonus mentioned in contract. Wondering If I can ask for bonus to be parked and put in pension. If I am and then if I wanted later to transfer pension contributions/bonus into an external pension would I be able to do that without losing the tax saving?
 
Revenue won't allow that.

Salary Sacrifice

3.8

Any arrangement under which an employee waives an entitlement to remuneration or accepts a reduction in remuneration, in return for a corresponding payment by the employer into a pension scheme, is considered to be an application of the income earned by the employee rather than an expense incurred by the employer. Such arrangements are subject to the provisions of section 118B TCA 1997.

If in doubt, seek tax advice from a tax professional who can review the relevant contracts of employment and Revenue guidance and make a determination as to whether Salary Sacrifice is occurring.

Gerard

www.pra.ie
 
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