asked the Minister for Finance when he intends to remove the anomaly whereby taxpayers under schedule E are granted tax relief up to 15 per cent of income inclusive of contributions made to a superannuation scheme for additional voluntary contributions to their pension funds, while other PAYE taxpayers are not granted same.
Written Answers. - Tax Anomalies.
157.
The Revenue Commissioners have informed me that Schedule E taxpayers may claim tax relief in respect of any ordinary annual contributions and special contributions (including additional voluntary contributions) paid to pensions schemes approved under Chapter II of Part 1 of the Finance Act, 1972 or to a statutory pension scheme.
Tax relief in respect of the aggregate of such contributions by an employee in any year is limited to 15 per cent of the total remuneration for that year from the office or employment in respect of which the contributions are paid. In this regard a special contribution may be treated as an ordinary annual contribution for the year in which it is paid or may be apportioned to such years as the commissioners direct.
In the case of occupational pension schemes which do not provide facilities for members to pay additional voluntary contributions, the commissioners are prepared, subject to certain guidelines, to approve separately constituted individual pension arrangements to enable members to pay such voluntary contributions. Tax relief will at all times be subject to the 15 per cent limit already mentioned.
Schedule E taxpayers who are not members of occupational pension schemes would be regarded as qualifying individuals for the purpose of effecting retirement annuity contracts under sections 235 and 235A of the Income Tax Act, 1967. Tax relief up to an amount equivalent to 15 per cent of the individual's net relevant earnings is available in respect of premiums paid on contracts approved by the Revenue Commissioners.