Lump sum and tax relief?

[Chiggles]

Hi

I have a lump sum to invest. I have a personal quinn life pension but not a work one.

I would like to put 20% of my salary from my lump sum into my personal pension plan.

Q is: can I avail of tax relief if i write the cheque myself? Can I put the money in from my savings and then claim tax back at the end of the year?

I would normally ask my employer to pay it directly from my salary but am in the process of moving company and dont want to look for a favor from them as I head out the door.

Thanks

Chiggles

 

[ClubMan]

I would like to put 20% of my salary from my lump sum into my personal pension plan.

Yes. You just inform Revenue and they will refund the tax. You can then claim PRSI relief. You can also offset contributions against 2007 tax if appropriate. The key posts in this forum cover most or all of these issues. I am assuming that the full 20% of income would be eligible for tax/PRSI relief. Whether or not this is the case depends on how you split it between 2007 and 2008 and your age.

Q is: can I avail of tax relief if i write the cheque myself? Can I put the money in from my savings and then claim tax back at the end of the year?

You can claim tax and thereafter PRSI relief immediately once you have made the contribution.

 

[boaber]

Hope this link helps?

[broken link removed]

In order to obtain tax relief on contributions to a contract the individual must have a source of “relevant earnings”. In simple terms “relevant earnings” means income arising in any income tax year from a trade or profession or from a non-pensionable employment.

A “non-pensionable employment” is one where the individual is not included for benefits under an approved occupational pension scheme relating to the employment. The one exception is where the sole benefit arising is restricted to a lump sum payable upon death.

Once there is a source of relevant earnings, the fact that an individual may also have a separate source of pensionable employment is not of concern. However, tax relief will be allowable based on the source of relevant earnings only. Income must be earned income and income from an investment company does not qualify.