Your money - 18 January 2012

Q. I have been working part-time with a company for nearly two years and I understand that when full-time employees have been with the company for two years they are entitled to join the pension scheme. I am wondering if I am entitled to join the scheme once I reach the two years.

A. Previously many part-time workers were denied access to company pension schemes. The Protection of Employees (Part-Time Work) Act 2001 now requires that part-time employees be treated no less favourably than their comparable full-time counterparts. This will mean that if an employer provides a pension scheme for its full-time workers, then access to the scheme must also be possible for comparable part-time workers, unless exclusion can be justified on objective grounds. An exception to this occurs if a part-time employee works less than 20% of the normal hours of the comparable employee.

What is a comparable employee?

A comparable employee is a full-time employee to whom a part-time employee compares himself/herself and where certain conditions are met.

As a part-time employee you can be compared to a comparable full-time employee in the following situations:

1. Where both employees perform the same work under the same or similar conditions or each is interchangeable with the other in relation to the work.
2. Where the work performed by one of the employees is of the same or a similar nature to that performed by the other and any differences between the work performed or the conditions under which it is performed by each, either are of small importance in relation to the work as a whole or occur with such irregularity as not to be significant, and
3. The work performed by the part-time employee is equal or greater in value to the work performed by the other employee concerned, having regard to such matters as skill, physical or mental requirements, responsibilities and working conditions.

If you are unsure of your position you should contact the Pensions Board at:
Verscholyle House, Mount Street, Dublin 2
Tel: 01-6131900

Q. On 5th December I sold a property abroad on which I surprisingly, made a profit. Do I need to pay tax here in Ireland on that profit and if so how and when?

A. If you are resident or ordinarily resident and domiciled in Ireland, you are liable to Irish Capital Gains Tax (CGT) on worldwide gains. Therefore if you dispose of a foreign asset, for example a property in another country, Irish CGT will apply. As you sold the property on 5th December 2011, the CGT will be payable by the end of January 2012.

You will need to calculate the tax payable on the disposal having taken into account the cost of the property and the costs of acquisition and disposal, e.g. auctioneers fees, solicitors fees, etc. If you are also liable to capital gains tax in the foreign country, a credit may be available against your Irish CGT for some or all of that amount. The availability of this credit will depend on the country the property is situated in and the relevant provisions of the Double Taxation Agreement with that country. Where you cannot take credit for this foreign tax, this amount is instead deducted from the sale proceeds in calculating the chargeable gain for Irish C.G.T. purposes.

Having calculated the Irish tax due (having first taken account of any foreign tax), you should send a cheque for that amount to the Collector Generals Office, Sarsfield House, Francis Street, Limerick. The payment should be accompanied by a C.G.T. payslip which is a short form providing relevant details in respect of the payment. This payslip can be obtained from your local tax office or alternatively downloaded from www.revenue.ie. Note that the payment must be made by 31 January 2012, otherwise interest may be charged on the late payment.

Irrespective of whether you will have submitted a tax payment or not, you will be required to submit a tax return to Revenue in respect of this disposal. Generally the tax return is due by 31 October in the year following the calendar year in which the disposal was made. Therefore in your case the return will be due by 31 October 2012. This return will take the form of your normal tax return on which you should include details relating to the disposal. If however you are not required to submit an annual tax return to the Revenue, you should complete Form CG1 which again is available on the Revenue website. Note that penalties and surcharges may apply for incorrect or late returns, therefore it is important that you remember to do this by next October (or November if filing on ROS).

Q. I received one of the letters from Revenue regarding my Contributory Old Age Pension. They have amended my tax credits and it appears that based on this, I will now be paying tax on my Occupational Pension. I have calculated my overall joint income between myself and my wife and we have a gross income of less than the exemption figure of €36,000. I have had difficulty with trying to get through to the tax office and my Occupational Pension will now be reduced when I am paid at the end of the month. Am I correct in stating that I should have a revised tax credit cert if my overall income including that of my spouse is less than €36,000?

A. You are correct in that your tax credit certificate should reflect the exemption limit of €36,000 as your joint income is expected to be less than this in 2012. You should continue to try the number given by Revenue for your relevant district. This number should be at the top of the notice you received from Revenue regarding your tax credits. The tax office should be able to issue a new certificate and while you may end up paying tax in the current month, this will be refunded to you the following month once the new certificate is implemented by your occupational pension provider.

For future reference, if you have access to a computer it may be worth your while considering registering for the PAYE Anytime Section on the Revenue website. If you access the website at www.revenue.ie and click on PAYE Anytime you can register to use this service. Once you have registered, Revenue will advise you of your personal pin number and once this has been received you can in fact manage most of your tax affairs directly online rather than having to contact the tax office or visit them.
 
Basically once registered for PAYE Anytime, you can:

• View your tax record
• Claim a wide range of tax credits: service charges, rent credit etc.
• Apply for refunds of tax including health expenses
• Declare additional income
• Request a review of tax liability for previous years
• Re-allocate credits between yourself and your spouse
• Track your correspondence submitted to Revenue

The benefits of PAYE Anytime are:

• Manage your own tax affairs in a quick, easy, free and secure manner
• Immediate update of your tax credits
• Speedy repayments
• Secure access 24 x 7x 365

A small number of customers cannot claim a review using the PAYE Anytime such as:

• Individuals selected by Revenue to complete a Return of Income (Form 12)
• Customers who are registered for Income Tax and also have income subject to PAYE.

If you have any queries on money or taxation matters which you would like answered, please send them to "Your Money", c/o Examiner Publications (Cork) Ltd., City Quarters, Lapps Quay, Cork