Max use of tax efficient pension contributions

Blub123

Hi there.,
Have been kicking something around in my head and wanted to throw it out there so it can be shredded if appropriate to do so.
My hobby is sports trading.
To those who don't know its using betfair exchange to trade certain sports. The debate is out there if its gambling or not but that's a debate for another day.
Anyhow after a NR of years I've become rather good at it and earn approx every month what would equate to my take home from my regular job after tax and pension contributions.
I've banked this extra religiously and will mid year have approx 1 years take home saved.
I have an executive retirement pension and my query is this.
Would it be possible and make tax efficient sense to get my employer (with whom I'm a director and shareholder) to make a single contribution to my pension rather than pay me a wage and I would live off the sports trading savings while continuing to earn more month to month via this avenue?
(I'm 42 and have total monthly between employer and employee contributions sitting at just under 2k p/m)

Alternatively I've a mortgage approx 100k and an investment property that's washing its face... both of which I was thinking of splitting the monies towards however want to ensure I'm being as efficient as possible with this additional "income" as its classed as betting winnings by revenue and so is tax free.

Hope this makes sense & thanks in advance for any pointers and advice.
Thanks

mystic86

Blub123 wrote: »

Hi there.,
Have been kicking something around in my head and wanted to throw it out there so it can be shredded if appropriate to do so.
My hobby is sports trading.
To those who don't know its using betfair exchange to trade certain sports. The debate is out there if its gambling or not but that's a debate for another day.
Anyhow after a NR of years I've become rather good at it and earn approx every month what would equate to my take home from my regular job after tax and pension contributions.
I've banked this extra religiously and will mid year have approx 1 years take home saved.
I have an executive retirement pension and my query is this.
Would it be possible and make tax efficient sense to get my employer (with whom I'm a director and shareholder) to make a single contribution to my pension rather than pay me a wage and I would live off the sports trading savings while continuing to earn more month to month via this avenue?
(I'm 42 and have total monthly between employer and employee contributions sitting at just under 2k p/m)

Alternatively I've a mortgage approx 100k and an investment property that's washing its face... both of which I was thinking of splitting the monies towards however want to ensure I'm being as efficient as possible with this additional "income" as its classed as betting winnings by revenue and so is tax free.

Hope this makes sense & thanks in advance for any pointers and advice.
Thanks

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

Age-related earnings percentage limits
You can get tax relief, up to the relevant age-related percentage limit of your earnings in any year.

You might have more than one source of income. If you do, this relief is only from the source of income in respect of which the contributions are made.

Age-related percentage limit for tax relief on pension contributions
Age Percentage limit
Under 30

15%

30-39

20%

40-49

25%

50-54

30%

55-59

35%

60 or over

40%

For example, an employee who is aged 42 and earns €40,000 can get tax relief on annual pension contributions up to €10,000.

Total earnings limit
The maximum amount of earnings taken into account for calculating tax relief is €115,000 per year.

Blub123

mystic86 wrote: »

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

Age-related earnings percentage limits
You can get tax relief, up to the relevant age-related percentage limit of your earnings in any year.

You might have more than one source of income. If you do, this relief is only from the source of income in respect of which the contributions are made.

Age-related percentage limit for tax relief on pension contributions
Age Percentage limit
Under 30

15%

30-39

20%

40-49

25%

50-54

30%

55-59

35%

60 or over

40%

For example, an employee who is aged 42 and earns €40,000 can get tax relief on annual pension contributions up to €10,000.

Total earnings limit
The maximum amount of earnings taken into account for calculating tax relief is €115,000 per year.

Thanks for that.
Does this also apply for executive pensions.
Is the business not able to stick a lump sum into my pension... I. E. Essentially I'd take a pay cut for the year and get the business to put a lump sum in lieu into my pension.
Appreciated

Calahonda52

If its tax free where is the tax break or perhaps thats not the point

jimmy456

Blub123 wrote: »

Thanks for that.
Does this also apply for executive pensions.
Is the business not able to stick a lump sum into my pension... I. E. Essentially I'd take a pay cut for the year and get the business to put a lump sum in lieu into my pension.
Appreciated

That could be deemed salary sacrifice. You could maybe look at diverting bonuses to pension and negotiate further pay rises as pension contributions as opposed to salary.

Another thing to note is that the level of pension contribution is linked to your salary. ie if you have no salary you have no pension scope