directors pensions

Tax Benefits for Directors Pensions

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  • Corporation tax relief in respect of pension contributions
  • No PRSI payable on employer pension contributions
  • No USC payable on employer pension contributions
  • No BIK on employer’s contribution to employee’s pension plan
  • Tax Free Investment growth; there is no DIRT tax payable in respect of investment returns
  • Tax Free retirement lump sum of 25% of your fund subject to a max of €200,000, for pension’s values in excess of €800,000 the balance remaining of the 25% after the first €200,000 is drawn down is subject to a lower tax rate of 20%
  • Post Retirement tax planning options where you have the option of investing into an Approved Retirement Fund (ARF) and Approved Minimum Retirement Fund (AMRF) and these pensions assets are passed inheritance tax free to your spouse and to your children if they are over 21
  • Higher investment limits for Company Directors, no earning cap limit of €15,000 that applies to Sole Traders
  • Directors can include Death in Service Benefits of up to 8 times salary and this is a tax write off for the business, 4 times salary is payable to spouse tax free and the balance is paid by way of an annuity
  • Directors salary can be protected by way of an Income Protection policy in the event of long term illness or disability again this can be paid by the business and it’s a full tax write off also for the business, the maximum level of cover allowed is up to 75% of the current salary.
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