Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

HAVE been pay­ing into a Per­sonal Re­tire­ment Sav­ings Ac­count (PRSA) for sev­eral years as my em­ployer doesn’t of­fer a com­pany pen­sion scheme. I’ve been of­fered a good job in Lon­don and will be mov­ing there shortly. Should the job work out well, I imag­ine this could be a per­ma­nent move for me. I’m un­sure what to do with my PRSA now. Can I con­tinue to con­trib­ute to it from abroad — and would my new em­ployer be able to con­trib­ute to it too (on my be­half )? If I can’t con­trib­ute to it from abroad, should I shut down my PRSA? I’m con­cerned about the tax im­pli­ca­tions of shut­ting down/cash­ing in the PRSA now. I’m also a bit re­luc­tant to trans­fer this PRSA to a British pen­sion scheme in case it is ad­versely im­pacted by Brexit. Alan, Sallins, Co Kil­dare YOU have the flex­i­bil­ity to stop and start your PRSA con­tri­bu­tions when­ever you wish and there is nor­mally no penalty to do this. You can also close your PRSA but it may be ben­e­fi­cial to leave it in place in case you re­turn to Ire­land in the fu­ture.

If you leave Ire­land, your PRSA will re­main here and hope­fully con­tinue to grow in value (de­pend­ing on your fund choice). You can con­trib­ute to it from Lon­don — how­ever you would no longer be en­ti­tled to tax re­lief on the con­tri­bu­tions so my ad­vice would be to con­sider a sim­i­lar in­vest­ment with tax ben­e­fits in Bri­tain. Your new British em­ployer can­not con­trib­ute to your PRSA.

There are no tax im­pli­ca­tions to stop­ping your PRSA pay­ments or clos­ing it down. It will con­tinue to grow tax-free un­til you draw it down. You can draw down your PRSA at any time from the age of 60 to the age of 75. You may also be able to take your ben­e­fits ear­lier — for ex­am­ple, if you re­tire from em­ploy­ment at the age of 50 or over, or if you be­come se­ri­ously ill or dis­abled. At that stage, you can nor­mally ac­cess 25pc of the value as a tax-free lump sum and draw down a pen­sion in­come in re­tire­ment from the bal­ance. to have in our later years. For strong fam­ily rea­sons we wish to stay in our cur­rent house (down­siz­ing is not re­ally a vi­able op­tion) and so my query is: are there any op­tions in the mar­ket that would en­able us to re­lease some of the value of our home and re­main liv­ing in it? Do­minic, Co Dublin YOU are in a sim­i­lar po­si­tion to many peo­ple in Ire­land. You have a valu­able mort­gage-free prop­erty that is presently in­creas­ing in value and you would like to stay in your house and do not want to down­size.

In the past, you could have availed of a home-eq­uity re­lease where you took out a loan se­cured against your house and that loan did not need to be paid back un­til you sold your house, per­ma­nently moved out, or passed away. With some, you would have re­tained full own­er­ship of your house and could con­tinue liv­ing in it for as long as you wish. With the lim­ited credit avail­abil­ity, these lenders left the mar­ket in the down­turn.

How­ever, most of the Ir­ish banks of­fer an­other form of eq­uity-re­lease loans to­day, where you can ei­ther top up your mort­gage or get an eq­uity re­lease loan — as long as the value of your home is greater than what you now owe on your mort­gage and you re­pay the loan by the age of 70 (though it can be ear­lier with some banks). You should check if your bank of­fers any form of eq­uity re­lease loans and if you are el­i­gi­ble for one. Even if you can get such a loan from your bank, be sure you can af­ford the re­pay­ments on the loan and are not put­ting your­self un­der too much fi­nan­cial pres­sure by tak­ing such a loan on.

An­other op­tion to con­sider is the rent-a-room re­lief scheme. If you let a room in your home, the in­come you re­ceive may be ex­empt from tax. The in­come you re­ceive can­not ex­ceed €14,000 in 2017 and there are con­di­tions which must be met — which are de­tailed on the Rev­enue‘s web­site.

Typ­i­cally, the rented room or rooms must be let on a long-term ba­sis but can be a self-con­tained unit within the house, such as a base­ment flat or a con­verted garage. How­ever, if this unit is not at­tached to the prop­erty it can­not qual­ify for the re­lief. Short-term stays do not qual­ify for re­lief.

You could also con­sider Airbnb (or sim­i­lar sites) as a means of gen­er­at­ing an in­come. This is where you rent a room, shared room or house While we will en­deav­our to place your ques­tions with the most ap­pro­pri­ate ex­pert for your query, this col­umn is not in­tended to re­place pro­fes­sional ad­vice.

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