Director closing company

[YvonneP]

im a director of a limited company which myself and other director (husband) are now in process of closing.
There is about 10000 in company bank account and around 5000 in assets.
Accountant has said we need to get balance sheet down to zero.
He said we cannot take any tax free redundancy payment as director.
Is this right?

 

[Jim Stafford]

Your accountant is probably right, as you are probably paying PRSI at the S class, which does not qualify for statutory redundancy.

However, you may be entitled to tax free Termination payments, (If you google "Directors termination payments" you should find a very helpful briefing note from the Revenue Commissioners.)

You accountant should be advising you on other tax efficient cash extraction procedures, such as Pensions and Members Voluntary Liquidations. In a MVL you may able to avail of early retirement relief. An MVL would also mean that the company would be liquidated, and thereby you would save the expense of a strike off.

Jim Stafford