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STANDARD CAPITAL SUPERANNUATION CALCULATION

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  • 03-12-2016 5:50pm
    #1
    ID@THEWIDOWS
    Closed Accounts Posts: 51 ✭✭


    Hi
    Tagged:


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    #2
    exaisle
    Registered Users Posts: 2,675 ✭✭✭exaisle


    ID@THEWIDOWS wrote: »
    Hi Guys, Need help with a tax problem. I retired the 31st of December last from my employment and am having trouble with the SCSB calculaion.

    I have 32 and a half years service completed and I am on a salary per annum of €212000 per annum with additional benefits amounting to €11,000 per annum.

    Can someone break down this calculation for me as I am having trouble with it. Any assistance would be very appreciative.

    Regards

    Ivan

    Hi...please clarify what the benefits are. Is it benefit in kind or an otherwise taxable benefit?


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    #3
    exaisle
    Registered Users Posts: 2,675 ✭✭✭exaisle


    Basic exemption is €10160 + (32 x 765) = €34640.

    SCSB (assuming taxable Salary of 200,000, 206,000 and 212,000 in the last 3 years)

    A X B / 15 - C is 206,000 x 32 / 15 - 0 = €439,466

    Basic exemption was €34640 so SCSB is €439,466 - €34640 = €404,826.

    Bear in mind that this is a quick reply! I'm open to correction...but as always....if you're not 100%, go see an accountant.


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    #4
    ID@THEWIDOWS
    Closed Accounts Posts: 51 ✭✭ID@THEWIDOWS


    exaisle wrote: »
    Basic exemption is €10160 + (32 x 765) = €34640.

    SCSB (assuming taxable Salary of 200,000, 206,000 and 212,000 in the last 3 years)

    A X B / 15 - C is 206,000 x 32 / 15 - 0 = €439,466

    Basic exemption was €34640 so SCSB is €439,466 - €34640 = €404,826.

    Bear in mind that this is a quick reply! I'm open to correction...but as always....if you're not 100%, go see an accountant.

    Thank for your help. I have been on 212,000 per annum plus 11000 benefits in kind for the last three years. Can you please explain why my taxable salary would differ in your calculation from 200 to 206 to 212000. I'm just also wondering how to calculate my total emoluments bearing in mind I have 32.5 years service completed. Do I take off 6 months and dosalary up to middle of 2015 being the complete 32 years service minus the half year?


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    #5
    Lockedout2
    Registered Users Posts: 402 ✭✭Lockedout2


    It's the salary for the last 36 months.

    So it's (212,000+ 11,000) x 32.5/15 - lump sum from pension.

    Subject to €200k limit.

    http://www.revenue.ie/en/tax/it/leaflets/it21.html


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    #6
    exaisle
    Registered Users Posts: 2,675 ✭✭✭exaisle


    Lockedout2 wrote: »
    It's the salary for the last 36 months.

    So it's (212,000+ 11,000) x 32.5/15 - lump sum from pension.

    Subject to €200k limit.

    http://www.revenue.ie/en/tax/it/leaflets/it21.html

    I respectfully disagree (although my calculation was wrong anyhow)...

    Firstly, I'd wonder why the OP has included the BIK separately as it should be included on his P60s/P45? So...is the 11,000 included in the 212,000, or do OP's P60/P45 show a total of 223,000? Lets assume the latter...

    In A x B / 15 - C, B is the number of complete years of service, not number of years completed, and is always a whole number. (Why Revenue say "complete" instead of "full" as in the calculation for the increased exemption is beyond me). Unfortunately, there isn't an example to illustrate this on the Revenue website, but there's one here:
    http://www.accaglobal.com/content/dam/acca/global/PDF-students/2012/sa_mar11_f6irl.pdf

    So...the SCSB will be 223,000 x 32/15 (475,733) less whatever lump-sum OP takes from his pension fund* less the increased exemption of 34,640.
    *That lump sum is subject to the €200,000 maximum, not the SCSB.


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    #7
    Lockedout2
    Registered Users Posts: 402 ✭✭Lockedout2


    You are correct of course it's complete years.

    I think that the €200,000 limit applies to the amount that can be exempted by the combined amount of these exemptions

    Section 5.7
    http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-05/05-05-19.pdf


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    #8
    exaisle
    Registered Users Posts: 2,675 ✭✭✭exaisle


    Lockedout2 wrote: »
    You are correct of course it's complete years.

    I think that the €200,000 limit applies to the amount that can be exempted by the combined amount of these exemptions

    Section 5.7
    http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-05/05-05-19.pdf

    And indeed, you are correct on the maximum exemption being €200,000.

    Two heads are better than one...especially if one is slightly hungover... :-)


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    #9
    ID@THEWIDOWS
    Closed Accounts Posts: 51 ✭✭ID@THEWIDOWS


    Lockedout2 wrote: »
    You are correct of course it's complete years.

    I think that the €200,000 limit applies to the amount that can be exempted by the combined amount of these exemptions

    Section 5.7
    http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-05/05-05-19.pdf

    So what you are saying in layman's terms is that unless I waive my rights to receive such OP payment, I would take the scsb amount minus the basic exemption and the maximum I can get tax free would be 139000 + 61000 tax free and this equates to 200000 and anything over that amount is taxable


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