787C PRSAs – method of granting relief for PRSA contributions

Summary

This section sets out the manner in which relief under the Chapter in respect of PRSA contributions is to be given. The relief is given as a deduction from or set-off against relevant earnings (from a trade, profession or employment) for the year of assessment for which the premiums are paid. Any excess of contributions over the allowable contributions may be carried forward to subsequent years.

Details

Method of giving relief

(1) Relief from income tax in respect of PRSA contributions is to be given only to an individual with a source of relevant earnings from a trade, profession, office or employment.

(2) Relief is to be given by deduction from, or set-off against, the assessment on relevant earnings for the year of assessment in which the contribution is paid.

(3) Where a contribution is paid after the end of a year of assessment but on or before the return filing date for the year, an election may be made to have the contribution treated as if it was paid in the earlier year.

For the year of assessment 2010, the earnings limit is deemed, by virtue of section 790A, to be €115,000 for the purpose of determining how much of a premium paid by an individual in the year of assessment 2011, is to be treated as paid in the year of assessment 2010.

(6) Where the “net relevant earnings” as determined for a year are subsequently adjusted, any relief granted on the basis of the unadjusted earnings is also adjusted as necessary.

(7) Where relief is granted under the section in respect of a contribution, relief is not available under any other provision of the Income Tax Acts in respect of that contribution.

Carry-forward of relief

(4) & (5) Where, because of an insufficiency of net relevant earnings, full relief cannot be given for a year of assessment in respect contributions paid in that year, the unrelieved amount may be carried forward to the next or succeeding years and treated as a contribution paid in that or those years. Where relief cannot be allowed because of the earnings cap, this disallowance will be treated as arising because of an insufficiency of net relevant earnings.

Relevant Date: Finance Act 2019