Denise is a swimmer who retired from swimming in 2023. She wishes to claim Sportsperson's Relief. To do so, she reviewed her income from swimming for the 15 years prior to retiring (including 2023). She selected the 10 years which allowed her to maximise her relief claim.
One of the years she wishes to claim for is 2016. Denise is single. In 2016 she was 30 and contributed €20,000 to a RAC.
Denise’s taxable income for 2016
|
Amount |
Swimming earnings |
€70,000 |
Swimming expenses |
(€5,000) |
Personal appearance income |
€30,000 |
RAC contribution |
(€20,000) |
Taxable income |
€75,000 |
Income Tax |
|
€33,800 @ 20% |
€6,760 |
€41,200 @ 40% |
€16,480 |
Income Tax for 2016 |
|
(before credits and other reliefs) |
€23,240 |
After claiming Sportsperson's Relief for 2016, her taxable income has changed.
Denise’s taxable income for 2016, after Sportsperson's Relief
|
Amount |
Swimming earnings |
€70,000 |
Swimming expenses |
(€5,000) |
Sportspersons Relief (€70,000 x 40%) |
(€28,000) |
Personal appearance income |
€30,000 |
RAC contribution |
(€20,000) |
Taxable income |
€47,000 |
Income Tax |
|
€33,800 @ 20% |
€6,760 |
€13,200 @ 40% |
€5,280 |
Income Tax for 2016 |
|
(before credits and other reliefs) |
€12,040 |
Denise will receive a deduction of €28,000 for 2016. This deduction will not affect the calculation of her net relevant earnings for the purposes of tax relief on her RAC contributions. Denise will carry out a similar review for the other nine years she selects to calculate her total relief. The relief will be given by way of repayment.