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Tax treatment for pension losses

  • 28-06-2022 4:13pm
    #1
    Sebastian Dangerfield
    Registered Users, Registered Users 2 Posts: 1,825 ✭✭✭


    Im trying to reassure a family member who is self employed and close to retirement. I will be advising them to obtain professional advice but for now am trying to calm them down a little...

    The person is invested in a PRSA which, since 1 year prior to retirement, is invested 75% is a level 4 risk-rated bond fund, and 25% in cash. They received a statement that shows the bond fund down 20% YTD, which wipes out a large pool of capital 4 months before they were due to retire. Is anyone aware of whether the investment loss can be offset against tax in some way, or is there a good information source on the matter that could be recommended?

    Thanks



Comments

  • #2
    Stratvs
    Registered Users, Registered Users 2 Posts: 958 ✭✭✭Stratvs


    They have presumably obtained tax relief on the PRSA contributions against their self-employed income in the year(s) the contributions were made. Therefore they have obtained relief at either 20% or 40% on the original contributions depending on the income. The current net cost to them is therefore the contributions less the tax relief received. Perhaps compute that net of tax relief cost and it may not look as bad.

    There isn't any additional tax relief on drops in PRSA values.



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