My Dad hits retirement age in Feb - keen to get some thoughts

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Cloudd

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My dad is hitting retirement age in early February. I was keen to get some ideas on the scenario.

- He has a public pension as of Feb
- I don't think he has a personal pension set up
- House fully paid off
- Has a commercial unit as a Sole Trader that he intends to sell in the coming months and has a potential buyer lined up (as far as I am aware, it is worth c. €180k with a c. €40k mortgage on it)

I don't think he has sought any financial planning / advice to date.

What I'm trying to figure out is:

- would it be worth his while to set up a 'retirement' account/PRSA before retirement age so he could potentially back-date with a lump sum/AVC and get tax refund?
- what's the most efficient way for him to sell the commercial property from a tax pov?

Any guidance appreciated.

Thanks
 
Cloudd said:
He has a public pension as of Feb
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When you say a public pension, do you mean the State Contributory Pension or a Public Service pension?

If he's not a public servant, is he an employee in the private sector, a company director, a self-employed sole trader or partner?
 
He could make a once-off PRSA contribution of 40% of his 2022 income + whatever earned income he has in 2023. If I assume that he won't be paying tax at 40% in 2023 as he's retiring early in the year, then it might be more efficient just to contribute 40% of his 2022 earned income. If he has no other ongoing income post-retirement aside from the State Contributory Pension, then his income will be exempt from Income Tax. So after he retires he could withdraw 25% of the PRSA value as a tax-free lump sum and time the withdrawal of the remainder so that it doesn't exceed his tax exemption threshold in any year.

I've made a lot of assumptions in the above, which might not be true. He should get advice from an accountant and a financial broker before doing anything.
 
Cloudd said:
- what's the most efficient way for him to sell the commercial property from a tax pov?
Click to expand...
Check if 'retirement relief' can be applied, to reduce / eliminate and Capital gains tax if there has been a gain. His accountant should be able to advise.
 
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