Pension tax

Zane97

If somebody turn 66 , are thery able to receive full untaxed state pension if the own there own company?

barneystinson

Robbie G wrote: »

If somebody turn 66 , are thery able to receive full untaxed state pension if the own there own company?

No

Zane97

How much of it is taxed?

NinjaTruncs

If you have other income it's all taxable. if you have no other income it's not taxable.

On a side note, how can someone who has their own business not know the basics of taxation...

Daxve

Not been reading the news recently then.

If over 65 you can earn €18,000 if single or €36,000 if married without paying tax on it. These figures are made up of all taxable income from all sources - pensions, rental income, dividends, deposit interest, income from work etc. The old age pension is taxable and is added to all other income to determine your total taxable income.

If all income including the pension is below the figures above then no tax is due.

If you are above these amounts but less than double them you pay tax at a rate of 40% (marginal Relief) on the amount above the limit or you are taxed in the normal way which ever is more beneficial and results in you paying less tax. With Marginal relief you get no tax credits it's just a straight 40% on the amount over the limit. So a married couple with income of €38,000 would pay tax on €2,000 (€38,000 - €36,000) @40% = €800.

If your income is over double the limits you pay tax in the normal way, full credits etc.

More detail here:
http://www.revenue.ie/en/tax/it/leaflets/it8.html

nd

Hi my father is 69 and gets an eircom pension and the dsp pension.

He applied for the exemption which is 36,000.

His combined pensions come to about 39,000 a year.

So we assumed he'd be taxed 40% on the 3,000 approx that he is over the 36,000.

He just got a letter today stating that his credits of 36,000 are reduced by the amount of his dsp pension, which is about 11,000.

So he has to pay 40% tax on everything over the 36,000 - the 11,000 or so.

So 40% on everything over approx 25,000.


Can this be right?

Slasher

NinjaTruncs wrote: »

On a side note, how can someone who has their own business not know the basics of taxation...

You'd be surprised the number of people who have their own business and have no pension, no life insurance, no employers' liability cover, etc.

Anyhow, let's stick to answering people's questions and not taking shots at their lack of knowledge.

sled driver

Slasher wrote: »

You'd be surprised the number of people who have their own business and have no pension, no life insurance, no employers' liability cover, etc.

Anyhow, let's stick to answering people's questions and not taking shots at their lack of knowledge.

Well said Slasher. Plus, people in business tend to engage professionals to look after these things for them so they can concentrate on what they know and do best - namely, running their own business !!!!

Geuze

Robbie G wrote: »

If somebody turn 66 , are thery able to receive full untaxed state pension if the own there own company?

Assuming they have paid the required amount of PRSI, then they will receive a State Pension.

See here:

http://www.welfare.ie/EN/Schemes/Pension/Pages/spc.aspx

It is taxable.

They can have any job they like, own as many companies as they like, after 66.

What matters is do they qualify for the State Pension by paying enough PRSI.

Daxve

nd wrote: »

Hi my father is 69 and gets an eircom pension and the dsp pension.

He applied for the exemption which is 36,000.

His combined pensions come to about 39,000 a year.

So we assumed he'd be taxed 40% on the 3,000 approx that he is over the 36,000.

He just got a letter today stating that his credits of 36,000 are reduced by the amount of his dsp pension, which is about 11,000.

So he has to pay 40% tax on everything over the 36,000 - the 11,000 or so.

So 40% on everything over approx 25,000.


Can this be right?

The DSP pension has been taken into account by reducing the exemption limit by €11,000. He will pay 40% on all other taxable income over €25,000. The €11,000 for the DSP pension will not be included as part of the €25,000.

His Eircom pension is circa €28,000 so he will pay tax at a rate of 40% on the part of his Eircom pension that exceeds €25,000 (€3,000 @ 40% = €1,200) or he will pay tax in the normal way on the €28,000 @ a rate of 20% (his standard rate cut off point will likely be €41,800 less €11,000 = €30,800) less any allowable tax credits - the tax credits will have been reduced by €2,200 to allow for the DSP pension (€11,000 @20%). He will pay which ever rate would result in him paying less tax in this case most likely the marginal relief rate.

howamidifferent

https://www.boards.ie/discussion/comment/117806765#Comment_117806765

This is an Irish website so UK tax advise is not relevant.

Geuze

https://www.boards.ie/discussion/comment/117806765#Comment_117806765

Note that this is an Irish website, and your link refers to the UK.