Tax relief on AVC AND Public Service buy-back for same given year

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world201812

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Hi all,

Looking at public sector post 2013 pension scheme buy back options and have a question regarding tax relief on them.

I am advised by my public sector employer that ‘Tax relief qualifying pension contributions must be claimed from the Revenue Commissioners by the scheme member concerned’.

However, one thing I am not clear on is whether or not I can do a public sector buy-back for the previous year, AND also do an AVC on my salary for the same year in question and get the same 40% rebate for the same period?

So tax relief on what I pay to my employer of circa 40%. and same on private PRSA linked to main pension scheme of which I am a member?
 
world201812 said:
However, one thing I am not clear on is whether or not I can do a public sector buy-back for the previous year, AND also do an AVC on my salary for the same year in question and get the same 40% rebate for the same period?
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Provided the combined amounts are under the Revenue tax relief limit, I expect it would be ok.

Say you are aged between 40 and 49, so the tax relief limit is 25%. For convenience, say your salary is €100,000. So if you paid €20,000 towards buy-back you should have up to €5,000 available for tax relief on an AVC. However, if the buy-back was €25,000 there would be no tax relief for an AVC.
 
Hi Early Riser,

Many thanks, I understand the sums as you outline, but in terms of the lump sum buy out of what is called referable amounts, this could be significant, the quote I got was circa 55k.

I would be purchasing ‘pension referable amount and/or a lump sum referable amount subject to purchase limits’, to quote the circular.

However, would I get 40% of the 55k back from Revenue more or less straight away. I’d ring the Revenue but would they give me a straight answer, or would they give me answer in writing by email?
 
Thanks Early Riser.

I will be doing the buy-back in 2021 to cover the years 2019 and 2020, basically I can’t do the buy back for the first two years until I have two years service or vested as they call it.

I am trying to suss out if I can do my AVC for 2019 this year as normal, and that tax relief will not impact on my ability to get tax relief on any payment I make in 2021 to cover the years of 2019 and 2020.

If I ring the Revenue, which department on the phone can advise? Surely the regular revenue call centre number will not be in a position to advise?

Really, I am looking for the advice in writing, will Revenue do such a thing?
 
Sorry to jump in OP but I think it's on topic. How do you know how much you are paying in your Public Sector pension towards tax? I can't seem to figure it out.

Say you are aged between 40 and 49, so the tax relief limit is 25% and for convenience, say your salary is €100,000. Given this example, is there a quick way to figure it out to see how much you could contribute towards a PRSA AVC to ensure you have maxed that 25%?
 
Live Well,

I made it out its 6.5% deduction at source by public sector employee, so 25% in your case - 6.5% =18.5% of your salary is what you can contribute, I think.

Anyone shed any light on my query as above?
 
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