Company director best investment options

K

KIRUID

New Member
Messages
3
Hello, I have become a director of a new company. Company is 2 yrs old. A substantial amount of capital has been accumulated which I am looking to put into investments. Not sure what is best market approach with all the economic uncertainty around. Any ideas? Many thanks
 
Accumulated in the company or in your own hands?
If the former then haven't you formulated a plan in consultation with your accountant and maybe others on how best to manage this and eventually extract it tax efficiently from the company at some point?
 
Agree with ClubMan

The more important issue is how to extract it from the company as tax-efficiently as possible.

Pension contributions will be a big part of that.

Whatever you do, don't let it build up in the company as you will be just building up a headache for yourself later
 
At the moment all is within the company. I have thought of pension contributions. My constant concern is adding it all in one basket and not reaching the age of pension.
 
KIRUID said:
My constant concern is adding it all in one basket and not reaching the age of pension.
Click to expand...
Pension age could be as low as 50 in certain circumstances.

Early retirement - pensionsauthority

Most pension arrangements in the private sector permit members to retire early in certain circumstances. However, the benefits you receive are likely to be lower than they would otherwise be at normal retirement age.
pensionsauthority.ie
 
KIRUID said:
At the moment all is within the company.
Click to expand...
Almost certainly, as suggested earlier, you need a plan on how best to deal with and eventually extract (tax efficiently) accumulated profits from the business. You should probably start by discussing this with your accountant.
 
You options are probably i) withdraw funds as salary and invest them personally, ii) leave funds in company, invest them in (maybe) life assurance investment, which avoids 20% surcharge, and extract proceeds through sale of company. A reduced rate of CGT (20%) may apply to certain companies/individuals. Certain business disposals may also be exempt from CGT under retirement relief. Exit tax @ 25% or iii) employer contribution to pension.
 
KIRUID said:
I have already contacted a financial adviser and awaiting booking confirmation.
Click to expand...

This is not the right approach.

You should be talking to your accountant and a tax advisor about the most efficient way to extract the cash or how to avoid the very inefficient approach of leaving it in the company, paying Corporation Tax now and some other tax on exit.

Brendan
 
2 main options for extraction and investment in a pension will be a PRSA or a master trust (occupational pension scheme).
PRSA you will limited to 100% of salary.
For the master trust you will have to get a revenue max funding report. A financial advisor should have access to an online tool to do this. You may be able to put more than 100% of your salary into a master trust depending on current salary and years of service. For 2 years service unless your salary is high it there might not be much difference.

For both any growth will be tax free.

You could invest it inside the company and be subject exit tax at 25%. Extraction might be possible via retirement relief or entrepreneurial relief in future.

It would be best to work with your accountant, a tax advisor and financial advisor who can all talk to each other to work out the best option
 
You must log in or register to reply here.
Menu
Log in
Register