Is theres a tax efficient way of taking pofit out of company?

H

hikicker

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My company is going to make a tidy nett profit this year of approx €100k and I want to start taking some as this cash as additional income. Is there any ciircumstance where the CGT rate of 25% would apply rather than the penal rate of income tax/Prsi of approx 52%?? My understanding is this:

If I take €50k as a bonus, i'll pay around €25k in additional income tax (I already earn a salary of €60k) and the company will be pay 12.5% corporation tax on the €50k balance...

If I take €50k as a dividend, the company will be taxed 12.5% on the full €100k and Ill pay around €25k on my €50k dividend.

I know i could put as much into my pension as I wish however I'd prefer the cash now.

Any suggestions would be appreeciated
 
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No, assuming you mean to continue trading.

You could however liquidate the company and disperse any excess funds to the shareholders, whereby they will pay 25% CGT on the disposal of their shareholding
 
Hello Brendan

I just checked and the link in the Key Posts section re "Taking money out of a company" is broken
 
hikicker said:
I know i could put as much into my pension as I wish however I'd prefer the cash now.

Any suggestions would be appreeciated
Click to expand...

Just curious about this - are there not limitations on how much you can put into a pension on a yearly basis - that the amount which an employee/company can contribute is based on your salary and age, i.e., you can't contribute 100K towards your pension in one year if your salary in that year was 60K? Obviously there may be an AVC made based on last years salary as well but is there not a limitation still?
 
There is no limit to the amount a Company director can put into a retirement fund, provided the company can pay for it.

On the initial query, make sure you have exhausted your entitlements with regard to mileage & subsistance.

Tony
www.kdaaccountants.ie
 
I thought that there are restrictions regarding the amount that a company can pay into a director's pension fund - at least in relation to the amount that the company can get tax relief on
 
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