I'm trying to get an answer to a query. Unfortunately I have not seen a similar question else where.
So here goes. When my SSIA matures I have two options.
I can put 7,500 Euro in to my pension to avail of the 2500 Euro government gift. Or I can add 7,500 Euro as an AVC and gain tax relief at 40%. Am I correct in saying that going the AVC route is a better option?
Also a second related question. The 2500 Euro, does this have to go into the pension? Or can it be used to reduce my income tax burden for the current year?
Im no expert, but from what you say above I think the answer to No 1 is clear - do the AVC at 40% tax break (eh, subject to double checking the costs associated with the AVC I guess).
As for No 2, I'm afraid you need to ask an expert - I had thought the 2,500 was a bonus which was also invested in the pension, from what I've read on the web etc ?
Im no expert, but from what you say above I think the answer to No 1 is clear - do the AVC at 40% tax break (eh, subject to double checking the costs associated with the AVC I guess).
Actually it would be 42% (2006)/41% (2007) tax relief plus 4% PRSI relief plus 2% health levy relief (the PRSI/health levy relief claimed separately from the tax relief) - i.e. 48% or 47% total relief.