We are often asked about the merits of buying back years for pension purposes. It is possible to buy back actual years worked and notional years when there are gaps in past service. Below we have summarised the key information in relation to buying back actual years that were worked but previously cashed in.
As some Medical Consultants may be aware the HSE has extended the deadline of taking historic rest days to 31/12/2021 (from 31/12/2020).
In Ireland, there is currently a funding cap on pensions of €2m. This is known as the standard fund threshold. This is the maximum amount of pension that can be accumulated before a second tax is applied to the pension. This is a tax rate of 40% on the excess of over €2m. It applies to both private pensions (both defined contribution and defined benefit) and also public sector pensions.
It is that time of year again – tax time. We are approaching the deadline for filing tax returns for income earned in 2019. The tax return will reconcile any tax paid during 2019 in the form of preliminary tax with the final total amount due based on the tax return. Any surplus will be refunded and any shortfall will mean that the balance of tax owed for 2019 has to be paid.