Can pension tax relief be carried forwards or backwards?

N

nest egg

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I always understood pension relief in a given tax year, was on a "use it or lose it basis", however I noticed on Revenue's site for AVCs it has a box for amounts carried forward from prior years. Have I got this wrong, could I go back in time to years I didn't claim the full relief?

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No, the opposite.

Say you are in your 40s and earn 100k. You can get tax relief on 25% of your income going into a pension.

Now you put 100k into a pension this year. You can't get tax relief on the full amount; there's 75k with no relief, so you carry that forward and claim 25k each year until its used up.

Unfortunately it doesn't work the other way around.
 
Maybe it is already obvious to both posters but I'll say it anyway - if you contribute less than that yearly limit (25k in the example above, and you only contributed, say 10k) you have until November of the following year to contribute a further 15k on which you can claim relief on (for that first year).
 
Thanks all.
Is there an upper limit you can put into your pension in any one year or is it limited to gross earnings from your employment for that year?
In RedOnion example, he put in 100k (which was his gross earnings).

Thanks
Silvergrove
 
silvergrove said:
In RedOnion example, he put in 100k (which was his gross earnings)
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Sorry, I should not have used the same number as there is no connection.

With a PRSA, you don't even have to be working to contribute. But you can only get tax relief when you have earned income later.
 
Thanks RedOnion.
What about an AVC PRSA from a PAYE employment? I am public sector but want to setup an AVC PRSA.
Is there a limit to how much I can contribute in any one year in that case?

Silvergrove
 
silvergrove said:
I am public sector
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This is the bit that's way outside my comfort zone. There is the small risk of 'overfunding' a PS pension, but it depends on the scheme you're in, number of years service etc. For most people it's only theoretical. I'm afraid I would lead you astray if I definitively said yes there's no problem.
Talk to a financial advisor about setting up your PRSA, and they should be able to help you.

You've a very tight deadline if you want to make a contribution to make a claim for 2022 tax.
 
Kind of related to original post. I paid €6,000 into private pension in 2020 but completely forgot to claim it it on the tax return. Can I amend that year or alternatively, just add it to my 2022 or 2023 return. I'm well inside limits for each year.
 
PC100 said:
Kind of related to original post. I paid €6,000 into private pension in 2020 but completely forgot to claim it it on the tax return. Can I amend that year or alternatively, just add it to my 2022 or 2023 return. I'm well inside limits for each year.
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Ignore - incorrect.

You can only claim relief now on any amount contributed in 2020 that was in excess of your age related tax relief limit at the time.
If this doesn't apply then unfortunately you have missed the boat on claiming tax relief in respect of this 2020 contribution.
 
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ClubMan said:
You can only claim relief now on any amount contributed in 2020 that was in excess of your age related tax relief limit at the time.
If this doesn't apply then unfortunately you have missed the boat on claiming tax relief in respect of this 2020 contribution.
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Thank you, I thought that was the case. Lesson learned!!
 
PC100 said:
Thank you, I thought that was the case. Lesson learned!!
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Just resubmit your 2020 tax return. To the best of my knowledge you will get relief.
The deadline only prevents you from claiming a contribution made in 2020 against 2019 earnings.

I'm not an expert, so I can't give you a definitive answer, but I'm not aware of any legislation preventing a relief apart from the general 4 year rule. It's definitely worth your while checking if the above is possible.
 
RedOnion said:
Just resubmit your 2020 tax return. To the best of my knowledge you will get relief.
The deadline only prevents you from claiming a contribution made in 2020 against 2019 earnings.
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Actually - that may be correct and I am incorrect?
Apologies for any confusion - maybe somebody else can clarify for sure.
 
@PC100
To clarify, there's nothing elsewhere in the TCA that overrides section 865 on this. You've 4 years to make a valid claim. Just resubmit your 2020 return, and you'll get relief. You might need to provide Revenue with a certificate showing the payment you're claiming for.
 
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