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Preliminary tax questions

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  • 10-04-2024 10:40pm
    #1
    MarcusMaximus
    Registered Users Posts: 60 ✭✭


    I am self-employed and due to retire in the summer, after which point my business will be closed and I will no longer be trading. I pay tax and PRSI etc. retrospectively every November through ROS. I usually pay preliminary tax at 100% of the previous year, i.e. the one I am filing for. I am wondering will I still have to pay it once I am no longer trading? I presume I will have to pay it this year as that will be for 2024 as part of my 2023 return. However, what about the following year and subsequent years? If so, I presume I could pay 90% of the current year’s estimated income from pensions? Is that right? Thanks.



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    #2
    Xander10
    Registered Users Posts: 4,604 ✭✭✭Xander10


    If you can work out your projected income for 2024 you should be able to make a reasonable estimate of preliminary tax for 2024, probably lower than the 100% of 2023 liability.

    Whether you will have to file a form 11 thereafter and remain a chargeable person, will depend on what streams of income you will have after retiring



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    #3
    MarcusMaximus
    Registered Users Posts: 60 ✭✭MarcusMaximus


    Well I base my returns on the accounting year September to August so I will be able to predict my liability for 2024 based on 2023, which is what I usually do. It’s the following year I am wondering about, when I will have no income from the business. I will pay whatever balance there is left for 2024, unless it’s a refund, and then I would usually add the p. tax for 2025. From what you say, whether or not I will have to do that and continue to do so will depend on those income streams, which will consist of pensions only, none of them huge but hopefully enough.🤞



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    #4
    scheister
    Registered Users Posts: 1,301 ✭✭✭scheister


    alot will depend on what you do following retirement. If you are no longer a chargeable person deregsiter for Income tax from 31/12/24 and therefore you should not need to pay any PT for 2025. When filing in October 2025 only payment will be balance of 2024.

    If you are still a chargeable person post retirement pay 2025 PT based on 2025 amount not 2024.



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    #5
    MarcusMaximus
    Registered Users Posts: 60 ✭✭MarcusMaximus


    Great thank you. I don't plan to work beyond August this year, rather I will be spending my time on some creative pursuits which won't earn me any income. So all my income will be from pensions. Does that mean I will no longer be a chargeable person?



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    #6
    scheister
    Registered Users Posts: 1,301 ✭✭✭scheister


    https://www.boards.ie/discussion/comment/122027321#Comment_122027321

    If all your income is from pensions taxed at source you will no longer be a chargeable person. You may need to file a Form 12 if you credits to claim such as medical expenses or if your income is taxed over a few pensions as credits wont align in most cases



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    #7
    MarcusMaximus
    Registered Users Posts: 60 ✭✭MarcusMaximus


    Well I will have a couple of private pension funds as well as both the Irish and UK state pensions. Only the private funds will be taxed at source afaik so perhaps I will remain chargeable in that case? I'll look into the form 12 for the credits thanks.



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