Class S director and redundancy payment

henryd65 · 21-12-2009 3:32pm #1

I am having trouble finding the answer to this:

A Class S director is being made redundant and is getting a lump sum payment.
Can that person avail of the relief available under the redundancy payments act ?

mickbyrne · 22-12-2009 9:26am

He qualifies for top slicing relief etc under tax rules. Not sure about redundancy.

dbran · 22-12-2009 9:34am

Hi

I understand his PRSI class only determines what he is entitled to get from social welfare and does not have a bearing on the tax free element of redundancy payment which is dependent, among other things, on how long he has worked in the company or business.

Kind Regards

dbran

John Conlon · 31-12-2009 9:58pm

The answer is yes. The relevant reliefs apply to payments on termination of employment.

They dont apply to any payments built in to the contract e.g. if there was a 3 months salary payment in the contract it would not qualify.

Before using the increased exemption €10,000 or the Standard Capital Superannuation Benefit pensions advice would also be useful as he would have to forego future lump sums, ARF tax-free amounts etc.

Hope this helps

John Conlon

Class S director and redundancy payment

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