My understanding is that you can claim tax relief on pension contributions subject to an age-related earnings percentage limit and a total earnings limit. Provided that those limits are not exceeded, you get tax relief at your marginal rate.
In my case, I am 37 and earn €135k pa. I have a DB pension scheme and I recently set up an AVC PRSA to make an additional contribution of €500 per month to my pension. Provided that my pension contributions are 20% or less of €115,000 pa, my understanding is that I should be receiving tax relief of 40% of my pension contribution. Is this correct?
The reason I am asking is that when I applied on My Revenue for the relevant tax credit, I only received a tax credit of 20% of my pension contribution. In other words, when I inputted €500 per month as my AVC PRSA contribution, I had understood that I would be receiving a tax credit of €200 per month, but I am only receiving €100 per month. I queried this on My Enquiries and received the below response:
“Maximum relief is a percentage based on age and relevant earnings. As you are 37 the percentage limit is 20 per cent”.
Before I go back to Revenue and make a fool of myself, is my understanding correct, or have I misunderstood how tax relief on pension contributions work? Thanks.
In my case, I am 37 and earn €135k pa. I have a DB pension scheme and I recently set up an AVC PRSA to make an additional contribution of €500 per month to my pension. Provided that my pension contributions are 20% or less of €115,000 pa, my understanding is that I should be receiving tax relief of 40% of my pension contribution. Is this correct?
The reason I am asking is that when I applied on My Revenue for the relevant tax credit, I only received a tax credit of 20% of my pension contribution. In other words, when I inputted €500 per month as my AVC PRSA contribution, I had understood that I would be receiving a tax credit of €200 per month, but I am only receiving €100 per month. I queried this on My Enquiries and received the below response:
“Maximum relief is a percentage based on age and relevant earnings. As you are 37 the percentage limit is 20 per cent”.
Before I go back to Revenue and make a fool of myself, is my understanding correct, or have I misunderstood how tax relief on pension contributions work? Thanks.