Tax free termination payment for directors

P

Pancake

Guest
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.
 
You must log in or register to reply here.
Menu
Log in
Register