Retirement annuities

You may claim tax relief for premiums that you pay to a Retirement Annuity Contract (RAC). Your RAC must be approved by Revenue for tax purposes. Subject to conditions, you can qualify for this relief if you:

• have self-employment income from a trade or profession
• or
• have pay for a job that is not being pensioned in a company pension scheme.

In general, Revenue give tax relief on your premiums in the tax year in which they are paid. If full relief cannot be granted in a tax year, you can generally carry the unrelieved premiums forward to the following year. In certain circumstances, relief for premiums paid in a tax year may be granted in the previous year.

You can find more information in the Pensions section on:

• the limits for tax relief on RAC Premiums
• pension contributions
• and
• how to claim tax relief.

You can take a benefit from your RAC:

• on or after the age of 60, even if you are still working, but not later that the date you reach age 75
• or
• in the event of serious ill-health, where you become permanently incapable of carrying on your occupation or any occupation of a similar nature.

If you die before you have taken a benefit from your RAC, the value of your retirement fund will be paid to your estate.

Company pension plan

To obtain tax relief on contributions to an RAC you must have a source of 'relevant earnings', which includes income from non pensionable employment.

An employment is non pensionable where:

• the employee is not included for retirement benefits under an approved occupational pension scheme relating to the employment
• or
• the sole benefit arising under the scheme is restricted to a lump sum payable upon death.