Tuesday, March 17, 2009

Claiming Tax Relief on Pension or PRSA

If you are an employee who does not contribute to a PRSA / AVC PRSA through salary deduction, you will need to 'manually' apply for Tax Relief from Revenue. You are entitled, subject to certain limits, to have the amount that you contribute to a PRSA/Pension deducted from your gross income before that income becomes liable to tax.

If a contribution exceeds the age or income related Revenue limits in any one year, it can be carried forward for relief in subsequent years. If a contribution is paid after the end of the year, but before the following 31 October, relief may be allowed in the earlier year provided you elect (notify Revenue) to do so on or before the 31 October. If it's an AVC PRSA, you must notify before end of October.

Self-employed taxpayers filing returns under ROS may avail of the extended filing date (mid November) to make an election and pay a contribution to a PRSA/Pension.

The normal procedure is as follows. You will have to write to your local tax office and send them the PRSA1/PRSA2 Certificate that will accompany the PRSA policy document (RAC if it is a Personal Pension), quoting your PPS Number. They will then adjust your tax credits etc.

If you are applying for pension reliefs for previous years, Section 17 of The Finance Act 2003 amends the time limits to 4 years as set out in Section 865 of the Taxes Consolidation Act 1997. Do remember that a claim for relief for 2007 must be submitted to your Tax District before 31st December 2011.

Featured website http://www.prsa.ie/

Edited 24/10/2012


Michael said...

When claiming ones PRSI refund (say on a personal Pension) is a full PRSI refund given. Ie do they process the refund in the same manner as if the contributions what done via ones payroll?

I ask as from a recent refund it appears I only got the health levy back?

Also on permanent health insurance schemes, this implies if one was paying for such a scheme via their payroll, it too would avail of similar adjustments to your PRSI contributions, but speaking to revenue they say that PHI isnt granted PRSI refunds?

Gerard said...


It is probably better to raise the Personal Pension (RAC) refund directly with the section in Limerick (1890 203070) that dealt with the claim. There may have been some variance in relation to the year in which you were claiming for. The 'Notes' section of the CGPRSI 1 Claim form may clarify it for you.

My understanding of the relief available on PHI is in line with what Revenue have told you. Individual PHI policies are usually paid by Direct Debit from the clients own resources. Group Schemes are usually paid by the employer.

zachary said...

As a PAYE taxpayer, I took out first PRSA in October 2010 and signed document in financial advisers office to have tax relief claimed against 2009 liability. Revenue rejected '09 application as documents not received by them until after end October. Do I have grounds for redress?

Gerard said...

Revenue say that they must be notified of the client's intention to backdate the tax relief before the file and return date.

It is my understanding that they don't have to accept for backdating if they were not notified (by you) in writing or by phone of your intention to do this.