Case Studies
Alternative Tax Efficient Pension Plans
This involves operating your business through a company which builds up retained profits over time.
This creates a personal saving investment vehicle in a tax efficient manner and avoids the restrictions on pension funding.
Reduced level of taxation from 55% to 20% for profits left in the business.
Possibility of using this investment structure to pay off personal bank loans in a tax efficient manner.
It could be particularly useful for medical practitioners who can now incorporate their practice.
| Structure For Creating Alternative Pension Fund | Other Benefits | |
| (e.g. when pension cap exceeded) | ||
| 1) Business carried on via limited company | 1. On death, spouse can take out accumulated funds tax free | |
| 2) Business has good profits | 2. On retirement can take out the accumulated funds under capital gains tax rules | |
| 3) Can save gross 200k per annum | 3. Control over tax payments for sale of business at a later date | |
| Company carries on the business | ||
| *Annual profits | € 200,000 | |
| Pays Corporation tax | € 40,000 | |
| After tax | € 160,000 | |
| Annual savings | € 160,000 | |
| After 6.25 years | € 1,000,000 | |
| Plus investment return after tax say | € 20,000 | |
| Retained profits after 6.25 years | € 1,020,000 | |
| *After all costs including directors salaries |
