Taxes Consolidation Act 1997 section 787

Nature and amount of relief for qualifying premiums

Section 787 sets out how relief is given for qualifying premiums paid to a retirement annuity contract, including the computation of net relevant earnings and the age-related percentage limits on the amount of relief available.

• Relief is given by deducting qualifying premiums from the individual's relevant earnings, subject to age-related percentage limits ranging from 15% to 40% and an overall earnings cap of €115,000 on net relevant earnings.
• Net relevant earnings are the individual's relevant earnings for the year less trading losses, capital allowances relating to the source of the relevant earnings, and annual or other payments deductible in computing total income.
• Where qualifying premiums exceed the permitted deduction for a year due to insufficient net relevant earnings, the excess carries forward to the next year and, if necessary, to subsequent years.
• A premium paid after the end of a tax year but on or before the return filing date may be elected to be treated as paid in the earlier year, provided the election does not cause the deduction to exceed the applicable percentage limit.