Company Director Pensions

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Executive Pensions (40 second read)

Current pension legislation allows a company to make very substantial contributions to an Executive pension established for your benefit, without you being subject to benefit in kind (BIK) taxation. These contributions are a fully allowable expense against corporation tax so they are a great tax planning opportunity. The company can also fund for the years you have missed and there is no PRSI liability for the company as a result of remunerating you this way.

One of the most attractive and tax efficient ways for Company Directors to extract profits from their company and turn them into personal wealth is to have their company make contributions to an Executive Pension plan and if you want to take full advantage you will benefit from advice on the more technical aspects of pension law and investment management.

The advantages of an Executive Pension are as follows;

  • The contributions made by your company are deductible against trading profits in the accounting period in which the contribution is made, thus reducing your corporation tax bill.
  • Even though they are for your benefit, contributions made by your company to your Executive pension are not treated as a benefit in kind.
  • The age related tax relievable amounts don’t apply to company contributions. Your company will generally have far higher scope to fund than you would have personally (see more information about how much you can have your company contribute to your pension in our Executive Pensions Frequently Asked Questions).
  • Your company can back-fund for the years you have missed.
  • There is no PRSI or USC liability for the company as a result of remunerating you this way.
  • Your funds grow tax free within the pension.

If you retain us to arrange your Executive Pension we will provide you with detailed investment advice.

If you are approaching company year end we can show you how using an Executive Pension can reduce your corporation tax bill. Few business owners use the legislation to maximum effect. Most have scope to do additional tax planning.

 

Contact us today on 01 546 1100 for a no obligation discussion or book a 15 minute video call with us here.

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The material and information contained on this website is for general information purposes only. Neither the writer nor Highfield Financial Planning Ltd makes any warranty as to the completeness, accuracy or reliability of the information or the suitability or availability of products or services, referred to on the website, for any purpose. You should not rely on any information contained on this website as a basis for making any financial, legal, taxation or other decision. The information presented does not include all the considerations which are relevant to the topic discussed as to do so would render it un-readable. When considering any financial issue you should seek the advice of a suitably qualified adviser.

ABOUT US

Best Pension Advice is a trading name of Highfield Financial Planning, the most client focused financial services company in Ireland. We provide superior advice on Retirement Planning for all types of pension available in the Irish market. As Specialist Investment Advisers we can also help you to manage the investment of your pension to achieve your income objectives in retirement.

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