In March of this year, the Government published the National Pensions Framework – giving Pension savers a potential final opportunity to: 

 -  Maximise the current higher rate tax relief on Pension contributions

It is proposed to reduce top rate tax relief of 41% to a standard rate of 33% by 2014.

 -  Make the best plan for your preferred retirement age

It is proposed to gradually increase the State Pension age from 65 to 68 with effect from 2014. The loss of 3-years in State Pension income could amount to almost €60,000 for a married couple. 

 Now is a good time to take action. 

If you are still a good few years from retirement, even just a small increase in your Pension savings now can really improve your final fund.  More money for you…less spent in tax. 

If you are approaching retirement, it is even more important to review your plan so you can make any increases necessary to provide a more comfortable retirement and benefit from higher tax relief.  Again, more money for you…less spent in tax. 

If you have not considered contributing towards a Pension plan until now, there has never been a better time to start.  There is now a new range of secure and lower risk fund options that can provide you with access to all of the tax benefits of Pension saving.

Remember, there are many other benefits to saving for your retirement, such as:

1. Tax relief on contributions
2. Tax free growth on your Pension funds
3. Tax free lump sum on retirement
4. Regular income in retirement, income tax free

The cost of cover depends on:

1 whether you choose the guaranteed or reviewable Income Protector option (regular payments with the guaranteed option are more expensive, but they will remain the same for the term of your plan unless you choose to change the level of cover);

2 your age

3 your sex

4 your occupation

5 whether you smoke

6 your deferred period and the age at which your cover ends

7 your health.

What is the difference between escalation and indexation?

Indexation: Your cover increases each year during the life time of your plan.

Escalation: Once the claim is in payment, the benefit paid to you will increase only if you have chosen escalation. If you did not choose escalation at the start of your plan and then subsequently made a claim, the incapacity benefit paid would not increase during the period of time you are eligible to claim the benefit.

Do I get tax relief on my payments?

Under current tax law (May 2009), payments to this Income Protection plan are eligible for full tax relief at your marginal rate of income tax. The maximum amount of payments you can claim tax relief on is limited to 10% of your total income for the year of tax assessment.

When will my benefit payments start?

This depends on what deferred period you have chosen. (The deferred period is the continuous

amount of time you have to be off work due to an illness or injury before the incapacity benefit will be paid.) Your deferred period can be 7, 13, 26 or 52 weeks.

How long will your benefit be paid for?

Your benefit will be paid until:

• you return to work;

• you reach the age at which your cover ends;

• you die;

whichever happens first

Do regular payments need to be made while I am claiming?

While you are receiving benefit, you do not need to make payments and the cover will stay in force. Your regular payments will start again when your benefit ceases.

It is always recommended to save regularly and plan for the unexpected or difficult times that we may be faced with such as an illness or unexpected unemployment etc.  

Savings must be easily accessible for whenever you may need it.

In addition to saving, it is ideal to have an investment. The benefit of investing is that there is a greater potential to earn higher returns over the longer term.  There are a number of factors to be considered before you make your investment.  All factors should be discussed with a financial advisor beforehand.  

 2 Protecting Yourself, Your Family & Income:

Have you ever thought what would happen if you became sick in the morning and could not work or what would happen if you died or became seriously ill? 

Statistics show*:

• Men have a one in four and women have a one in five chance of becoming seriously ill before the age of 65.  
• The most common illnesses are malignant cancer, heart related illnesses and stroke. 

It is very likely that if you suffer a serious illness, you will survive.  However, for many of those who survive, life will never be the same again. Some need to change their homes, career & lifestyles, while others need ongoing medical care.  If you take out serious illness cover, you will be provided with a lump sum to make sure you don’t have to worry about financial security. In general, the younger and fitter you are, the cheaper the cover will be.

*(Source:  Irish Life)

3 Planning for Your Retirement:

If you don’t plan for your retirement, who will? What is the best way to put those savings away? A Retirement Plan is one of the easiest and tax efficient ways to save for your retirement. A major benefit of investing in a pension is that for every €1 you invest the Government will subsidise up to almost half of your contribution subject to your net relevant earnings.

Who are the beneficiaries of the gift/inheritance?

1. What are the assets and liabilities of the person making the gift?
2. Are there business/farm assets to be considered?
3. Is there personal property?
4. Are there savings or investments to be considered?
5. What life assurance is currently in place?
6. Are there pension benefits that need to be considered?
7. Has a Will been made?   

This list is used to assess the value of the assets that will be passed on.  Tax is payable on the value of all assets inherited/received by the beneficiary. It is always recommended that you obtain legal and tax advice to ensure that any arrangements you are putting in place are appropriate to your circumstances.

Once an assessment of the initial queries 1 to 8 has been assessed and confirmed as outlined above, the taxable value of the beneficiary(s) inheritance can be calculated.  This can be achieved by deducting the tax free group threshold* amount from the total amount of inheritance for the beneficiary(s).    

Once the total surplus amount is calculated, and the tax liability is combined if there is more than one beneficiary, the capital acquisition tax can be calculated. Any surplus balance will be taxed at 25%.  

Capital Acquisition Tax Rates

For new gifts and inheritances received on or after 5th December 2001, tax is calculated according to the total of all gifts and inheritances received from all sources since 5th December, 1991.  

*Group threshold amounts vary depending on the relationship between the person making the gift and the beneficiary of the gift or inheritance.  Below are the current rates of tax which are adjusted on 1st January each year to take inflation into account. The Group Thresholds are as follows and have specific classifications:

 Group Threshold 1 – €414,799

Group Threshold 2 -   €41,481

Group Threshold 3 -   €20,740

           II.      The State Pension age is likely to increase.  If you are under 50 today, you may not receive the State pension until you are 68*.   Taking care of your pension can allow you to decide when you retire! 

       III.      Retiring soon?  Retirement tax free lump sums may soon be capped at €200,000 

       IV.      Tax relief on pensions may reduce to a standard rate of 33%for everyone! 

Higher rate tax payer:  €2 saved to a pension costs you €1.02.  The Government gives you almost €1 free.  Flat  rate 33% tax relief. €2 saved to a pension will cost you €1.18.  Government gives you only €0.82. 

          V.      A pension is the smarter way to save!

If you like saving money but don’t like paying tax, a pension is the answer for you. Unlike a deposit account which is subject to DIRT on growth, with a pension, you will receive tax back! In actual fact, a pension offers you

• v     Tax-relief on contributions
• v     Tax free growth of your pension fund
• v     Tax-free lump sum on retirement
• v     Regular income on retirement, income tax-free…..
•  

       VI.      With new secure and risk managed investment options, you can benefit from greater peace of mind while benefiting from tax relief. 

    VII.      Not having a pension can have the same effect as taking an 80% pay cut when you retire.  

 VIII.      Because your pension contributions are deducted from your gross pay, by paying into a pension, you are effectively paying yourself before paying the tax-man.  By reducing the amount of your taxable pay in this way, you are cutting your tax bill.  

       IX.      If your employer has established an occupational pension scheme for you and you haven’t joined it, you could be missing out on a once in a lifetime opportunity.   

           X.      REMINDER:  The deadline for income tax returns for the self employed is 31 October or 16 November 2010 for online returns!!

Financial Protection Cover for Non Married Couples*

Did you know that 1 in 10 people are co-habiting in Ireland?  Are you one of them?

More and more couples are now co-habiting in Ireland rather than marrying. Currently, couples who co-habit, even for many years, acquire no rights to each others property. The term most commonly used “common law husband / wife” confers no legal rights whatsoever. There is currently no rights, financial support or succession / inheritance rights for co-habitants.

This may change with the implementation of the Civil Partnerships Bill, however, there are no proposals as yet to alter the legislation relating to gift or inheritance tax for non married couples. 

Most people are aware that all benefits passing between married couples are exempt from Inheritance & Gift Tax. However this only applies in the case of a “Legal Spouse”. People who are not married are treated as strangers for Inheritance and Gift Tax purposes. 

The stranger threshold for Inheritance Tax is €20,740 (Jan 2010).  Any inheritances in excess of €20,740 are subject to tax at 25%. 

Who are co-habitees?

• Couples who live together as a precursor to marriage

• Couples who are engaged

• Couples who are already party to an existing marriage and who are separated but not divorced

Financial protection cover for non married couples: If you are one of the above you need to look at the following areas:

• Family Home Relief – The relief is available to any individual who satisfies the conditions  and not just to “common law” partners. After three years, family home relief may apply assuming all the other conditions are met.

• Mortgage Protection and Personal Protection

• Other Assets – the total value of all assets is liable to Inheritance and Gift Tax,  regardless of how long a couple is living together

• Use of the small gifts exemption

 For further information, please feel free to contact me by email; noelette.hassett@gmail.com

 *Source:  Irish Life Assurance.  The legal and tax information outlined above is correct as of Feb 2010

The cost of cover depends on:

1 whether you choose the guaranteed or reviewable Income Protector option (regular payments with the guaranteed option are more expensive, but they will remain the same for the term of your plan unless you choose to change the level of cover);

2 your age

3 your sex

4 your occupation

5 whether you smoke

6 your deferred period and the age at which your cover ends

7 your health.

What is the difference between escalation and indexation?

Indexation

Your cover increases each year during the life time of your plan.

Escalation

Once the claim is in payment, the benefit paid to you will increase only if you have

chosen escalation. If you did not choose escalation at the start of your plan and then subsequently made a claim, the incapacity benefit paid would not increase during the period of time you are eligible to claim the benefit.

Do I get tax relief on my payments?

Under current tax law (May 2009), payments to this Income Protection plan are eligible for full tax relief at your marginal rate of income tax. The maximum amount of payments you can claim tax relief on is limited to 10% of your total income for the year of tax assessment.

When will my benefit payments start?

This depends on what deferred period you have chosen. (The deferred period is the continuous

amount of time you have to be off work due to an illness or injury before the incapacity benefit will be paid.) Your deferred period can be 7, 13, 26 or 52 weeks.

How long will your benefit be paid for?

Your benefit will be paid until:

• you return to work;

• you reach the age at which your cover ends;

• you die;

whichever happens first

Do regular payments need to be made while I am claiming?

While you are receiving benefit, you do not need to make payments and the cover will stay in force. Your regular payments will start again when your benefit ceases.

For further information, please email noelette.hassett@gmail.com or call 086 0394816.

When you think about retirement you more than likely think about all the spare time that you will have and all the things that you would like to do when you reach that stage.  However, it is essential that you plan for your retirement while you are working, as you may well be left without sufficient resources to fund for your retirement.  Most want to be financially comfortable and continue their lifestyle into retirement.

The fact of the matter is that the State Pension (Contributory) will only provide you with an income of approximately €230.30 per week as at January 2010.   This amount is in the region of one third of the national average wage.  If you were to retire on this amount, it may mean a big fall in your standard of living and lifestyle.  Therefore, if you want to be able to enjoy a comfortable retirement, then you really need to think about putting some money away to save for your retirement.

The sooner and the younger you are when you start saving for your retirement, the easier it will be for you to save and you will also have a better chance of meeting your personal and financial goals.  If you don’t plan for your retirement, who will? What is the best way to put those savings away? A Retirement Plan is one of the easiest and tax efficient ways to save for your retirement. A major benefit of investing in a pension is that for every €1 you invest the Government will subsidise up to almost half of your contribution subject to your net relevant earnings.

How much money will you need to contribute in order to provide comfort and security when you retire? The answer will depend on a number of factors including:

• Your age now, and the age at which you think you’ll retire
• The amount of income you think you’ll need when you retire
• The investment returns which your fund achieves

 Your Financial Adviser will discuss these and other factors with you, and based on your answers, they can discuss and recommend what contribution you should make to achieve your financial goals.

For further information, please contact me on noelette.hassett@gmail.com

Capital acquisition tax is made up of two separate taxes:

1. A Gift Tax payable on lifetime gifts

2. An Inheritance Tax payable on inheritances received on a death.

Who is liable to this tax in Ireland?

The person receiving the gift or inheritance is primarily liable for the payment of inheritance tax.

If the giver or the receiver of the gift of inheritance is resident or ordinarily resident in Ireland, the entire estate will be liable to inheritance tax.

If both the giver and receiver are not resident or ordinarily resident in Ireland, then only Irish property will be liable to tax.

Who pays the Capital Acquisition Tax?

The person receiving the gift or inheritance is liable to CAT.

What assets are liable to Inheritance Tax?

A list of all assets and liabilities will be prepared by the representative of the deceased who will also complete a tax return in relation to Inheritance Tax. Tax is levied on the total net value of all assets received by the receiver of the gift, other than a legal spouse.

All assets are taken into account, the family home, an investment property, the total value of all savings, investments, pensions and life assurance policies.  Contents of the house will also be taken into consideration.

Reliefs and Exemptions:

The main exemptions/reliefs are

1.  Spouse Exemption- Gifts or inheritances received by one spouse from the other are totally exempt from CAT

2.  Agricultural Relief –the value of farmland etc can be reduced in certain circumstances

3.  Business Relief – can provide a similar reduction of 90 in certain circumstances

4.  Family Home Relief – exemption from Gift & Inheritance Tax is available in certain circumstances

5.  Life Assurance Relief – If you take out a life assurance plan, specifically for Inheritance Tax, the funds paid out on the plan will not be subject to Inheritance Tax – provided they are actually used to pay the tax bill. All reliefs are highly qualified.

For further information in relation to this, please contact Noelette Hassett at noelette.hassett@gmail.com

]]> http://www.uniquefs.ie/inheritance-tax-planning-continued/feed/ 0 http://www.uniquefs.ie/charity-night-in-the-kenyon/ http://www.uniquefs.ie/charity-night-in-the-kenyon/#comments Sat, 14 Aug 2010 07:22:28 +0000 moleary1 http://www.uniquefs.ie/?p=202 A great night was had by all in the Kenyon live venue on Thursday, 5 August.  The benefit night in aid of the Peter McVerry Trust (www.pmvt.ie), was a fundraiser for Ger Ryans upcoming 4 day trek to Iceland that he will be making in September. The event was hugely successful and has raised in excess of €2,500 in aid of the worthy Trust.  A big thank you to all who were involved in making the night a success; to Dermot Kinane – Kenyon Bar, to all of those who promoted ticket sales, to Ebony, who played all the great hits & particularly to all who attended the night, made generous donations and purchased tickets – making the night both enjoyable and successful.

An extended thank you to all who sponsored the night:

Joe Ryan – Whiskey Still,  Matt Muller – Abbey Court Hotel, Philip Talbot – Talbot Menswear, Carol O’Hara – Senses,  John Casey – Physiotherapist,  Ger Ryan, Ryan and Ryan Accountants & Unique Financial Services, Alan Kelly – MEP, Peter Ward – Country Choice, Jack L – Musician, David Rooney – Nenagh Arena, Lisa McGee – Spin FM, Brian Shanley – Ulster Bank, Nenagh Golf club, Roger Spain – Sounds of Music,

Geoff Jones – The Fairways, Michael O’Brien – Roots Restaurant, Ray Walsh – Walsh’s Pharmacy, Liam McGrath – Accountant, Keans Solicitors, Sarah Smith – IT Consultant,

Crinkle GAA Club, Michael & Marge Ryan, Noreen Maher – Picture Framing, Grainne Moylan – The Pantry Restaurant, Denis Quirke – Butcher, Caroline Kinane – The Nenagh Guardian, Aidan O’Brien – Horse Trainer, John O’Brien – Tipperary Hurler, Tony McCoy – Horse Trainer, George O’Leary – Goliath Packaging, Sean & Mary McCullough, Francis & Una Ryan and John & Susan Ryan.

We still have three items on display in the Kenyon Bar for auction for the charity which include:

• A framed Tipperary jersey previously worn by John O’Brien, signed by the 2010  panel
• A framed pair of jockey pants signed by all the jockeys who rode the Galway Plate

2010 donated by Tony McCoy who won the race

• A framed picture of the Aidan O’Brien trained, multiple winner of the Ascot Gold

Cup– “Yeats”, crossing the winning line.  The horse is owned by John Magnier.

The proceeds of the auction will be donated to the Peter McVerry Trust once sold.  Please contact Noelette Hassett on 086 0394816 for further information in relation to this.

Once again, many many thanks for your generosity and for helping to make the fundraiser such an enjoyable and successful night!

An account remains open for anyone who would still like to make a gesture, please drop your donation to Dermot Kinane in the Kenyon Bar or phone Noelette Hassett on

086 0394816.