Tax on Pension and Dividends

[dubman1]

Soon to be on a pension of approx. 19,000 and in addition approx 1000 euros dividends per year from UK stock (not part of pension fund).
At present dividends are taxed at the high rate ,including PRSI and USC..
Pension will be taxed at 20% rate but will dividends continue to be taxed at the higher rate in addition to paying USC and PRSI on them or will total income be set at 20%?
Is total income not taxed at 20% and then tax free allowance and tax credit subtracted from this to give the total tax liability?

 

[fayf]

They are two distinct income types, and are treated separately.

The Pension for a single person is subject to the PAYE standard rate band, currently €35,300. So you are correct, multiply pension gross amount(up to 35,300) @ 20 %, then, deduct the tax credits. In the case:

€19,000 x 20 % = €3,800
LESS Tax Credits = €3,300
PAYE Due = €500

The above will be processed by your pensions company,usually on a monthly basis, and USC & PRSI deducted also where applicable.

Dividends:
My understanding, is the converted Euro amount received, needs to be declared by you, on your tax return, and will be subject to PAYE & USC. As it appears your total income is below the €35,300, then 20 % PAYE will be due on the dividend received.