Michael is a cyclist who retired from cycling in 2024. He wishes to claim Sportsperson's Relief. To do so, he reviewed his income from cycling for the 15 years prior to retiring (including 2024). He selected the 10 years which allowed him to maximise his relief claim.
One of the years he wishes to claim for is 2017. Michael is single. In 2017 he was 42 and contributed €34,000 to a PRSA.
Michael's taxable income for 2017
| |
Amount |
| Cycling earnings |
€200,000 |
|---|
| Cycling expenses |
(€15,000) |
|---|
| Sponsorship income |
€60,000 |
|---|
| PRSA contribution |
(€34,000) |
|---|
| Taxable income |
€211,000 |
|---|
| Income Tax |
|
|---|
| €33,800 @ 20% |
€6,760 |
| €177,200 @ 40% |
€70,880 |
| Income Tax for 2017 |
|
|---|
| (before credits and other reliefs) |
€77,640 |
After claiming Sportsperson's Relief for 2017, Michael's taxable income has changed.
Michael's taxable income for 2017, after Sportsperson's Relief
| |
Amount |
| Cycling earnings |
€200,000 |
|---|
| Cycling expenses |
(€15,000) |
|---|
| Sportsperson's Relief (€200,000 x 40%) |
(€80,000) |
|---|
| Sponsorship income |
€60,000 |
|---|
| PRSA contribution |
(€34,000) |
|---|
| Taxable income |
€131,000 |
|---|
| Income Tax |
|
|---|
| €33,800 @ 20% |
€6,760 |
| €97,200 @ 40% |
€38,880 |
|---|
| Income Tax for 2017 |
|
|---|
| (before credits and other reliefs) |
€45,640 |
Michael will receive a deduction of €80,000 for 2017. This deduction will not affect his net relevant earnings for tax relief purposes.
Michael will carry out a similar review for the other nine years he selected to calculate his total relief. The relief will be given by way of repayment.