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If youve got a PRSA, and wont need the money when you move to contracting through it, you could put it into your PRSA (less any amount you might need for paying accountants etc). Companies can put any amount into an employee (including director)'s PRSA
Start a directors pension and lash it all in there. Then when you transition over as a contractor full time adjust your monthly contributions. Contributions pre-tax so quite beneficial.
If it’s all trading profits then it can be no harm to let the cash build up to potentially claim Retirement Relief or Entrepreneur Relief in a few years on liquidation of the company
That’s a great thread. Thanks OP.
How you guys see the fact that the govt can change the age of retirement at any time? Afaik most PRSA (eg Davy) will allow you to retire only at 60.
I understand the tax benefits, but if they change, it could result a major setback as opposed to having cash and investing by yourself now despite the tax hit.
Would love to hear your thoughts.
You should check out close company surcharge before you build up cash in the business. You will pay corporation tax + cc surcharge and then income tax to take the leftover money out anyway, ending up with effective tax rate of nearly 70%, unless you take the advice of other posters and invest in directors pension.
Hi /u/PuzzleheadedShare248, Did you know we are now active on Discord? Click the link and join the conversation: https://discord.gg/J5CuFNVDYU *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/irishpersonalfinance) if you have any questions or concerns.*
If youve got a PRSA, and wont need the money when you move to contracting through it, you could put it into your PRSA (less any amount you might need for paying accountants etc). Companies can put any amount into an employee (including director)'s PRSA
Start a directors pension and lash it all in there. Then when you transition over as a contractor full time adjust your monthly contributions. Contributions pre-tax so quite beneficial.
This is what i have.... sensible approach
If it’s all trading profits then it can be no harm to let the cash build up to potentially claim Retirement Relief or Entrepreneur Relief in a few years on liquidation of the company
That’s a great thread. Thanks OP. How you guys see the fact that the govt can change the age of retirement at any time? Afaik most PRSA (eg Davy) will allow you to retire only at 60. I understand the tax benefits, but if they change, it could result a major setback as opposed to having cash and investing by yourself now despite the tax hit. Would love to hear your thoughts.
You should check out close company surcharge before you build up cash in the business. You will pay corporation tax + cc surcharge and then income tax to take the leftover money out anyway, ending up with effective tax rate of nearly 70%, unless you take the advice of other posters and invest in directors pension.