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.