Pension Rule for Professional Sportspeople
The revenue recognises that most professional sportspeople have much shorter careers than a traditional career that might run to 65. The pensions options available to sportspeople is therefore different.
Personal tax relief on pension contributions
Where contributions are made to a pension fund by certain professional sportspeople the amount they can pay in is increased up to the age of 50.
|Age attained in year||Normal pension tax relief limit, as % of earnings (max 115k)||Special pension tax relief limit, as % earnings (max 115k), for professional sportspeople|
|31 to 39||20%||30%|
|40 to 49||25%||30%|
|50 to 54||30%||30%|
|55 to 59||35%||35%|
Therefore, professional sportspeople under 50 can get more tax relief than normal.
The following are recognised as professional sportspeople:
- Badminton Player
- Motor Racing Driver
- Rugby Player
- Squash Player
- Tennis Player
Accessing Pension Fund Early
Professional Sportspeople can also access their pension funds from age 50 onwards. While this may not be the best thing to do from a financial planning point of view, it is an additional benefit for professional sportspeople.
All professional sportspeople should talk to their tax adviser about reclaiming tax directly derived from playing professional sport. The relief works by providing a retrospective 40% reduction in their sports income for income tax purposes.
For more information on this aspect of financial planning for professional sportspeople, please contact me at email@example.com or 061 518365
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