Your Age and Irish Taxation
Some people are old at forty and some eighty year olds are
as young as the grandchildren they babysit.
We all grow old it is the basis of life in the universe.
From the time of the Big Bang forward the universe has been steadily aging,
cooling, and converting its energy from ordered into unordered forms in order
to eventually over billions of years to come to an end. If that didn’t depress
you then the good news is that in Ireland your age can offer some tax benefits
(1)
Pension Contributions: the amount of money which
qualifies for tax relief that you can invest in a pension as a percentage of
your income increases as you get older:
Age
|
Amount
which qualifies for tax relief
|
Under
30 years
|
15% of
net relevant earnings
|
30 to
39 years
|
20%
|
40 to
49 years
|
25%
|
50 to
54 years:
|
30%
|
55 to
59 years
|
35%
|
60 and
over
|
40%
|
This is subject to a limit of €115,000 of
income which can be taken into account and the fund can only be €2 Million
before any amount drawn from it is taxed at the high rate of tax (2016 Levels)
(2)
If you are over 65 then then the first €18000 of
annual income is exempt from income tax and €36000 for a married couple
(increased by 575 for first and second dependent child and 830 for each
subsequent child) Perhaps when you are 65 it would be a good time for them to
be leaving home but if they do stay then at least your tax is lower.
(3)
If you are over 65You get an extra tax credit
called the Age allowance which is worth €245 if you are single or widowed and
€490 if married or in a civil partnership.
(4)
Retirement Relief is available on the sale of
your business once you reach 55 and over
(5)
You are exempt from DIRT if you are over 65 and
your income is below the exemption limits above. (If you are over 65 and have
been charged DIRT then get on to us and we can help you reclaim it.)
(6)
Young trained farmers, there are a number of tax
breaks and stamp duty concessions available for young trained farmers. These are
farmers who are under 35 and who have completed certain farm related
qualifications.
Like everything in the tax code your treatment depends of
very specific details. Taxation is based on detailed laws and regulations and
not on fairness (even though it is meant to attempt to attain fairness which is
hard to see in the current system with a 12.5% tax rates for the biggest of
companies). It’s important not to miss out on any tax breaks you might have
coming to you due to your age.
© Frank McGivney, Frank McGivney & Co. Chartered
Management Accountants, 0469293891 27/04/2016
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