Tax
One of the significant advantages of pensions when compared with other forms of saving is the tax relief you can get on contributions, investment build-up and some benefits.
You receive tax relief on your own contributions to a pension arrangement within certain limits and you are generally not taxable on your employer’s contributions, if any (effectively this is tax-free pay).
Investment returns earned by pension schemes are also exempt from capital gains and dividend income tax and the lump sum you can take at retirement is tax-free up to certain limits.
The amount of tax relief you can get on your own contributions to a pension depends on your age...
Employers get tax relief on any contributions they make to a pension arrangement...
Tax is generally not charged on the investment income or capital gains earned by pension funds...
All pensions (annuities) are taxable as income under the PAYE...
The first €200,000 of pension lump sums payable is currently (2022) tax free...
Any amounts drawn down from an Approved Retirement Fund (ARF) are taxed as income and are also subject to the Universal Social Charge...
Benefits emerging from a pension fund on the death of a member are assessable on the recipients for the purpose of Capital Acquisitions Tax (CAT) and/or income tax...
Individuals have a maximum lifetime limit on the amount of their retirement benefits from all sources (except State pensions)...