Tax

With pension tax reliefs under threat and investment returns falling your retirement savings are in danger.

People who are saving for pensions should now be taking advantage of the last chance to get top rate tax relief on contributions.

But many people are nervous because of the poor performance of pension funds over the last decade.

Only 4 group pension managed funds made average annual returns in excess of 1% over the decade. The best performers were the following
Zurich Life 2.7%
Standard Life 1.9%
Merrion Investment 1.5%
Canada Life 1.4%

The pension levy will kick in on September 25th and will continue each year until 2014. The levy will be .6% of the value of funds.

It is expected that the Government will start reducing tax relief on contributions from 2012 onwards.

Backdated Tax Relief

If you make contributions in the next 6 weeks and backdate the claim against 2010 income this will qualify for relief up to 49%. For contributions in 2011 the tax relief will be 41% because contributions only qualify for income tax relief.

Rate of Tax Relief

The Government is expected to cut the the maximum rate of tax relief on contributions frm 41% to 34% in 2012, to 37% in 2013 and to 20% in 2014.

So it makes sense to start or top up your contributions this year to get the maximum tax relief.

With the dramatic fall in pension values, most of the people we meet are worried about the value of their investment portfolio and what impact this will have on their retirement. We can expect to live much longer than any previous generation, so the issue of providing sufficiently for our retirement is of increasing concern.

So if you are worried about your pension why not get a copy of our

10 POINT ACTION PLAN TO PROTECT YOUR PENSION.

Email us at pgahan@gahan.ie for your copy.

Taxpayers to have higher liabilities this year.

Taxpayers may face higher than expected liabilities this year because of the universal social charge and increased income levy.

Hundreds of thousands of people taxed via the self-assessment system must file their 2010 tax return, pay the balance of last year’s tax bill and pay preliminary tax for this year by the October 31 deadline.
Taxpayers who opt to make their return and pay their tax onlive via the Revenue Online Service (ROS) can avail of the extended deadline of November 15.

This year taxpayers may face a higher liability than expected for a number of reasons, including increases in the income levy in 2010 and the introduction of the universal social charge (USC).

The calculation of preliminary has become more complicated this year due to the introduction of the USC, which applies since January 1 this year.
The calculation of preliminary tax needs to be considered well in advance of the deadline. Where tax is underpaid the Revenue can charge interest.

So to make sure that you meet all your filing obligations you should now consult your tax adviser. This will ensure that you will know your liability in good time and have the funds in place to meet your liabilities when filing your return.