Close company pension contributions

[Bill90.]

Hi,

Just looking at going from sole trader to Ltd. Profits about 35k yearly. I have other sources of income to survive so I could do without giving 50% of the 35k away.

Just wondering if the director of a close company can still make the same pension contributions?.

Essentially putting all profits into my pension and not having any liability?.

Thanks.

 

[LDFerguson]

There's some debate out there about this, but the professional tax advice we've received is that there must be an employer / employee relationship in order for a company to pay into a PRSA. One of the elements of that would be some level of salary.

So I would say you'd need to be taking some level of salary from the company, even if very small, before you could put company contributions into a PRSA.

Regards,

Liam
www.FergA.com

 

[Bill90.]

There's some debate out there about this, but the professional tax advice we've received is that there must be an employer / employee relationship in order for a company to pay into a PRSA. One of the elements of that would be some level of salary.

So I would say you'd need to be taking some level of salary from the company, even if very small, before you could put company contributions into a PRSA.

Regards,

Liam
www.FergA.com

Hi Liam

That's great to hear, thanks. The difference between paying 50% on it now as a sole trader and putting it all into a pension for 15 years is absolutely massive.

I wonder why there's some debate about it tho?. Surely Revenue should be clear cut on such a basic idea?.

Regards.

 

[time to plan]

Hi,

Just looking at going from sole trader to Ltd. Profits about 35k yearly. I have other sources of income to survive so I could do without giving 50% of the 35k away.

Just wondering if the director of a close company can still make the same pension contributions?.

Essentially putting all profits into my pension and not having any liability?.

Thanks.

It's a small point but I think it's the company that should make the contrubutions, not the Director. If i recall correctly, if you do it this way, you won't pay PRSI or USC on the contributions. Other here will correct me if I have that wrong.