05 Dec End of Company Tax Year and Directors’ Pension Contribution Relief
Directors are you aware that you may be in the position to reduce your company’s tax bill by making a lump sum contribution from the company into your Director’s pension?
Do you know that any employer contributions to an approved pension scheme made on your behalf are treated as a business expense, deductible for Corporation Tax purposes in the company?
This allows for a Corporation tax savings on the total premiums paid at the Company Tax rate.
This is a way that you can take funds from the company, within revenue limits, for your benefit, without paying income tax, PRSI or USC.
If the pension is funded sufficiently, on reaching retirement, you would be in a position to extract €200,000 of the fund tax free under current legislation.
There are increasingly flexible options available with pension funds, combined with the tax savings, available on contributions made to pension plans.
This makes them worth considering as part of any potential cash extraction strategy from your company. Especially, as the additional corporate contributions available to company directors can be very significant, dependent of the level of salary earned by the director, period of service, shareholding etc.
To see if you can qualify contact us on: