Company Director - Tax Free Lump sum on retirement

HcksawJimDuggan

With regards a company director & shareholder receiving a lump sum upon retirement from a company, is there any restriction on the calculation used to calculate the tax free amount in line with regular employees? i.e. using the basic exemption calculation or the SCSB calculation

Cheers,
Hcksaw

nompere

HcksawJimDuggan wrote: »

With regards a company director & shareholder receiving a lump sum upon retirement from a company, is there any restriction on the calculation used to calculate the tax free amount in line with regular employees? i.e. using the basic exemption calculation or the SCSB calculation

Cheers,
Hcksaw

The rules for retirement are different from those applying on redundancy.

Here's a link to the Revenue Pensions Manual - Chapter 27 is the one you want:
http://www.revenue.ie/en/about/foi/s16/templates/pensions/

Such restrictions as there are on shareholder directors are referred to in Appendix 1.

HcksawJimDuggan

From what I can see, that guide relates to lump sum payments from a pension scheme.

What I'm looking to find out about is lump sum payments made from a company to a director. Found this guide on revenue's site:
http://www.revenue.ie/en/tax/it/leaflets/it21.html

Not sure if the same rules apply to company directors/shareholders though.

HcksawJimDuggan

Anyone else able to assist with this query?

Mr. Incognito

If its statutory redundancy its tax free.

If its contractual entitlement its taxed through payroll.

If its ex gratia you have the basic exemption, the increased exemption and the scsb excess where you qualify.

Thats the basic rules. Seek professional advice for specifics