Tax free termination payment for directors

P

Pancake

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I'm a proprietory director of a company which ceased trading at end of 2008 after more than 5 years trading. There is circa €50K in the bank to be distributed and a friend tells me that I can avail of tax exemption for termination payment to myself of up to €20,160 plus €765 p.a. for each full year worked. I need to know if this is correct as my accountant is away at moment.
 
There is a key post on AAM about this somewhere and other recent threads. The amount is €10,160 basic I believe, not €20,160. Do a search.
 
Graham_07 said:
There is a key post on AAM about this somewhere and other recent threads. The amount is €10,160 basic I believe, not €20,160. Do a search.
Click to expand...

Thanks Graham, I can't find the specific thread. Can you supply link?
 
I could do with a summary of this question. Where is Ubiquitous gone? Last activity 5th January.
 
If the company is close (5 or fewer participators/directors), the payment may be treated as a distribution, taxable in the company. You as director would also be liable to income tax on the amount at your marginal rate with a credit allowed for the tax already paid by the company.
Certain benefits are exempt from tax, including the provision of any lump sum on the retirement of a director. This exemption might only be available if the company is continuing trading. Complex. You may need to seek professional advice here.
 
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