Will Gilberson
Registered User
- Messages
- 12
Thanks for replyWith 20 years salaried service your max tax free lump sum from the company pension would be 1.5 times final remuneration less retained lump sums. With 300K in the PRSA the calculation for the pension scheme would then be 1.5 *100,000 - 75,000 = €75,000 tax free.
Taking 25% tax-free from the PRSA leaves you with €150k tax free cash in total.
Then you need to do a funding test to make sure you can get this amount of €75K into the company pension in the first place. Based on the above info it sounds like you’d have sufficient scope. Then there is the classification of this as an ordinary annual contribution versus a special contribution for tax relief for the company. Your accountant should be able to help here.
Thanks Gordon for your reply.
Unfortunately, statutory redundancy not an option as I am on S1 prsi
But am considering lump sum redundancy payment
Any other tax efficient payments company can do?
I'll, what did you end up doing here - I. E what was the most efficient exit strategy?I am 66 and retiring this year from my own company (I own 50% and will be selling my 50%)
I have 300,000 built up in PRSA's
There is €200,000 in cash in bank in the company. I have been employed as a director for 20 years. There is no company pension scheme set up
Can the company contribute 1.5 times my salary (100,000 x 1.5 = 150,000) to a newly set up Company Pension Scheme for me , and can I then immediately withdraw it as a Tax Free Lump Sum . Only purpose of setting up Comapny Pension Scheme would be to get Tax Free Lump Sum and result would be a loss in the company accounts in the current year, so that this loss could be carried forward to offset profits in future years
So in total , can I take 25% of 300,000 (75,000) in addition to the 150,000 from a Company Pension Scheme (i.e. 75,000 + 150,000) = 225,000 tax free
I know about CGT retirement relief, but I want the company to make a contribution, so it has a loss in the accounts, and can bring this loss forward against future CT Profits
This way I will benefit from Lump Sum Tax free Pension, and the Company going forward will benefit from reduction in CT by availing of Carried Forward Loss relief
Is above kosher and above board
Regards, Will
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?