Company Owner Pension

DUBLINIRL

In a scenario where a sole trader is making good money but they are getting taxed heavily and are subject to age/income related pension contribution restrictions on what can receive a tax deduction but they want to contribution more can anyone explain in layman's terms the benefit of incorporating the business to maximise tax efficient pension contributions (hopefully with an example) in a scenario where (i) the business owner does not need to pay themselves a salary and the business is very profitable with a healthy cashflow and a good bit of cash in the bank and; (ii) owner plans to sell the business and work at something else / not retire at that time.

i) You need to pay yourself a salary but no limit currently (except for €2.15m total fund) on company/employer contributions via prsa

ii) You sell the business and you're wondering what happens the pension fund you built up via the company prsa? It stays in the prsa until you decide to mature/move it.

Gerard Sheehy.

DUBLINIRL

Hi Gerard,

Is there a link between the salary paid to a director and the max ER contributions that can be paid into a directors pension?

Thanks.