As part of the government’s strategy to increase personal pension pots and relieve the burden on the State, any contribution made to your pension fund by the tax deadline is eligible for tax back on the 2016 tax year.
By starting a pension now, doing an AVC or topping up your existing pension before the tax deadline, you may be eligible for tax back of up to 40%, meaning that a typical €1000 investment will only cost you €600.
So how does it work?
You decide to make a contribution of €1000 by the tax deadline. Your income tax rate is 40%.
The €1000 is invested in your pension fund until you retire.
You are then eligible to claim back at your tax rate of 40%, meaning you get back €400 in cash.
Essentially, it only cost you €600 to top up your pension by €1000. Click here to read more.
It is important to note that every individual’s situation will differ and you should seek advice to learn whether you are eligible to claim.
But remember, time is of the essence! Individuals who both pay and file their tax returns through the Revenue On-line Service (ROS) have until Tuesday 14th November 2017 to pay a pension contribution and elect to backdate the income tax relief against the 2016 tax year. Those who do not qualify for the ROS extension must do this by 31st October 2017.
Why not give a Hennelly Finance advisor a call now on 091 586500 to find out how your pension pot can benefit from a contribution? Remember, it must be made by the tax deadline so don’t delay!