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Pension relief 40% vs 41% (offshore funds)

ixtlan · 2017-11-13 20:27:43

I've noted something very odd when doing the offline Form 11. I have a pension handled under PAYE payroll with an employer contribution and AVCs into a PRSA. I also had some Rabodirect offshore funds. So, I enter everything and see my liability. It's as I expect. Then I enter the pension details which should make no…

13-11-2017 8:27pm

#1

ixtlan

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Join Date: February 2002

Posts: 1130

I've noted something very odd when doing the offline Form 11.

I have a pension handled under PAYE payroll with an employer contribution and AVCs into a PRSA.

I also had some Rabodirect offshore funds.

So, I enter everything and see my liability. It's as I expect. Then I enter the pension details which should make no difference. The "contributions deducted for which no further relief is due", aka my AVCs and "contributions made on my behalf", aka the employer contributions.

To my surprise my tax liability went down... so I look more into the numbers:

I see a some income at 20%, some at 40% and the funds gain at 41%.

Whether I add the pension or not the taxable amount remains exactly the same. However whatever is added as the employer contrib has the effect of reducing the 41% total and increasing the 40% total.

Can this be right? And if it is does it suggest that my AVCs also should be dragging down the 41% total? Except there's no way for me to claim that.

The numbers are small enough that it doesn't matter, but I'm curious, is this real or a bug? It seems not to make sense since that employer contrib was not taxed at all (no USC even in 2016) so how can it be resulting in a refund?

Ix.

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