Self Admin Pension - Share loss - Capital Gains Tax - Voluntary Company Strike Off

C

cocoroko

Guest
Can you write of Self Admin pension loss on share purchases in pension against capital gains tax on a company with cash put into voluntary liquidation?

I am a owner/director of a company that has 200,000 in Cash and No debts.
Share capital 100 (99 me and 1 family member)
An accountant has advised to access to the cash I would need to liquidate company and pay CGT of 50K. I also have a self administered pension fund that has taken a bath on shares invested in an Irish bank :)-0) ... Not a long story. I bought the shares at 1/2 their peak price.... anyway loss on the shares was approximately 35k. Can I liquidate the company and write of the loss of 35k in my pension share loss against the 50K CGT from liquidation of company?
 
Have you considered a termination payment? There is an amount you can take tax free but also if you take a taxable termination payment at the same time, there is no PRSI. So you can extract funds at your standard rate plus USC which will be lower than your CGT rate. However, you must do it before you cease to trade so that its an allowable expense for the company and get relief from CT and also reduces the funds to be extracted in the company which will be subject to CGT.

Get proper tax advice and you can save yourself thousands.
 
Thanks Brendan, Paddy. the intention is to get certified tax advice and I want to go armed with suggestions. hence checking with experience on AAM. I had seen the thread on a termination payment which is great. Another question

Can you offset other share trading losses (not pension) agains CGT on a voluntary liquidation?

Cheers
Cocoroko
 
What age are you Coco? you may be able to claim retirement relief from CGT on liquidation. I work in tax in the south east if you require any further assistance
 
Coco,

Presuming the shares are quoted shares, you can offset the CGT loss on them with the CGT gain on the liquidation.

Also, in the current climate where investors have shares in banks for instance where the value is close to NIL, you can make a paper loss (negligible value claim) by making a submission to Revenue under s.538(1). This triggers a CGT loss even though the shares have not yet being transferred i.e. sold.
 
Hi Taxguy

I am 38. Great I can do that. Shares are quoted bank shares. Unfortunate I can touch the self admin pension fund loss.

Options:
1. Termination payment / Redundancy Payment. Whats the limit?. There are two directors. Can I give each director a termination payment. One director is retired. over 70.
2. offset previous losses on quoted shares against CGT.

what are indicative costs to liquidate? any other options

Cheers
Cocoroko
 
Liquidation costs are anything from €2k to €5k, it depends on circumstances of the company. Try googling low cost liquidation. Voluntary strike off is approx €600 and is also an option by the sound of things.

Have you considered taking your termination payment and selling the company? If a corporate structure bought it , they get their hands on the cash (via dividends paid up to parent) who in turn pay you the sale price. You then just have to concern youself with paying the CGT and no further costs (apart from making the necessary returns).

So why would another company be interested in this setup? There is no capital gain loss claim for the company you sold (asset stripping rules would apply to them s.621). However, the parent company does get a CGT loss of €199k at the time it sells its shares, provided its within 10 years of the purchase of your company. Interesting stuff if you can partner up with someone who also wants to manage their tax affairs.

As always, specific tax advice is required.
 
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