Both.What's the best source of advice - solicitor on employment law or accountant for the tax side? Both?
Payments of this nature are subject to particular tax breaks subject to a maximum of 200k over your working life. Others may have more detail on how this works in practice.
Hi all,
I work for a company where they are currently trying to clear out some staff and while there is no mass layoff or publicised voluntary redundancy I'm aware that there is a 'package' available for those who wish to depart. The package being 1 months notice + 12 weeks pay.
I'm working there just over 2 years. It's a toxic work environment, and this could be a good way out.
I'm never been in this situation before, so trying to understand how such a 'package' is dealt with from a tax perspective
1) Would such a 'package' to leave a job be deemed redundancy? What defines redundancy?
2) The 'package' would be worth approx €40-50k, but I'm confused with the Increased Exemption from Revenue with regards to the reference to waiving the Pension Scheme tax free lump. Being only 2yrs in the role, there is not a huge pot in the pension. I'm 43yrs old, so still expect to get another job and continue to build pension elsewhere after this. Can anyone help me understand this better?
Thanks,
Jim
The basic exemption for ex-gratia is 10k. You have a choice to select to take a further 10k exemption but you would waiver your rights to a lump sum from your pension at 65 (usually 25% of the pot). This is usually not a good idea as the amount later could, and should, be more than 10k. As pointed out, this only applies to the pension you have with that employer. As in your case you only have 2 years there may be a case for this but I would get proper advice on it as there may be some loophole/gotcha somewhere in the small print.The 'package' would be worth approx €40-50k, but I'm confused with the Increased Exemption from Revenue with regards to the reference to waiving the Pension Scheme tax free lump.
Is it default at 65 as you could take the pension at 50 right?The basic exemption for ex-gratia is 10k. You have a choice to select to take a further 10k exemption but you would waiver your rights to a lump sum from your pension at 65 (usually 25% of the pot). This is usually not a good idea as the amount later could, and should, be more than 10k. As pointed out, this only applies to the pension you have with that employer. As in your case you only have 2 years there may be a case for this but I would get proper advice on it as there may be some loophole/gotcha somewhere in the small print.
CorrectIs it default at 65 as you could take the pension at 50 right?
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