Arising from discussions with Revenue on the utilisation of the pensions earnings limit, as illustrated by Tax Briefing 74 Example 2, Revenue have announced in Tax Briefing 79 that transitional arrangements will apply for 2008.
As previously highlighted in eNews, Revenue's interpretation of the application of the pensions earnings limit in "dual income" situations does not allow for tax relief on contributions made to a personal pension plan where the individual's employment earnings exceeds the earnings limit and they are obliged to contribute to an occupational pension scheme.
Tax Briefing 79 provides that where a personal pension contract was entered into before 7 September 2009 and the contribution:
- was actually paid in 2008, or
- was paid before 7 September 2009 in respect of 2008
then Revenue's approach as illustrated in Tax Briefing 74 will not apply. This means that taxpayers may claim relief for the above contributions on the same basis as in previous tax years. However contributions made on or after 7 September 2009, in respect of 2008 or at any time during the year in respect of 2009, will be treated as illustrated in Tax Briefing 74.
Tax Briefing 79 confirms that the approach outlined in Tax briefing 74 will not apply to years prior to 2008.
Tax Briefing 74 is available here
Tax Briefing 79 is available here