directors pension question

kdowling

I am director of a company and a sole employee. My father is also a director but just in name as i needed two directors. I am also a employee of another company earning approx 55,000 a year. I have not drawn a wage from the company but there is €20,000 that can be drawn as a wage. I don't want to be taxed at the marginal rate of 41% so was thinking of getting my dad to put the 20,000 as a directors pension (he is 60 years old) rather than getting 10,000 now fter tax. Is this possible? will there be no tax on directors pension (ie could he withdraw the 20,000 + any money made on it in 5 yearsr time tax free)

Thanks in advance for any help

Kennie1

Too many variables to answer your question, such as how many years is your father a director, can the company pay him a salary for the next 5 years, is he married, has he any other source of income etc...

You will have to pay him a salary for 3 consecutive years within the 10 years before he retires for him to qualify to take a TFLS, and the TFLS will be related to his salary and service. You really need to see a financial advisor who will guide you through the most tax efficent method of releasing the capital of the company.