# Company director/employee - tax implications



## rquestions (14 May 2008)

Hi there. I'm new to here and business! My question is this, is there a FAQ on here with regards potential income tax costs/savings for company owner/director/employees? Previously I was a PAYE worker but am now a company owner/director/employee with > 15% shareholding in a compeny and I'm looking to see what others do with regards to wages to try and get the best from my take home pay. I'm not trying to avoid paying tax! I'm just trying to make sure I'm aware of all potential credits etc. that I should be aware of. 

Apologies if this isn't clear enough.


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## lipper (16 May 2008)

The golden question, take your dividends on the 15% share holding which you will only pay 20% cap gains, take out a pension with life insurance attached, buy a property and lease it back to the company.

Pay the tax man his dues and dont try to beat the system though, he will always win!


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## CRESPO (16 May 2008)

Em,Lipper am I missing something here ? I'm a 15% + shareholder and I maximise my pension, rent back my own property to the company ( on the advise of Brendan of AAM, who I will be eternally grateful as it the best piece of business advice I have ever got ) but I was under the impression that I would have to pay 42 % on any dividends ( 20 % dividend withholding tax plus 22 % by the following October 31st ). Could you clear that up for me. Cheers


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## TRMA (22 May 2008)

CAn anyone clarify excatly what the tax due on a dividend from a shareholding in a ltd. company is?


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## Graham_07 (22 May 2008)

TRMA said:


> CAn anyone clarify excatly what the tax due on a dividend from a shareholding in a ltd. company is?


 
When you take your dividend  the company deducts Dividend Withholding Tax (DWT) at 20%. When you file your tax return the gross dividend goes in, with credit for the DWT. If your marginal tax rate is no higher than 20% then no further tax due ( although may be PRSI/Levies) . If your rate is 41% then the difference of 21% in tax is due on the dividend also.


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## TRMA (22 May 2008)

Thanks. That clears up my confusion on it


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## OldBlueEyes (22 May 2008)

Dividends is one of the highest taxed means of extracting income from a company. You are better off extracting by means of salary.


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## money man (29 May 2008)

Are you sure you can purchase a property and then rent it to your company? Do those transactions not have to be arms length or something? Can you rent part of your PPR to your company?


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