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Company wind up

daludo

Hi folks

I have recently started a paye job, transferring all my tax credits to this from my limited company of which I was the only employee. My wife is also a director of my company. My question is, how do I access the remaining funds in my company bank account in the most tax avoiding way possible? The company is still active (electrical contractor) but very little if any trading going on

Thanks in advance

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BingCrosbee

Convert it all into expenses for your wife and yourself and backdate it.

daludo

Thanks for getting back to me. So travel expenses etc, all paid back tax free??

Jim2007

https://www.boards.ie/discussion/comment/118893809#Comment_118893809

No definitely not. The revenue will have to sign off on company wind ups and this is exactly the kind of thing they will check for and if they find something, then they will dig deeper. If it is a large amount of money seek professional advice, if not simply pay it out as a capital distribution.

daludo

Cheers Jim

A capital distribution? Tell me more please. Will I pay a big lump of tax? Can I pay into a pension and keep the remaining amount?probably get taxed at a high rate on the balance if I do??

Jim2007

https://www.boards.ie/discussion/comment/118895905#Comment_118895905

Given that you seem to be talking about serious money, best get professional advice.

Stanford

Does the company have any bank, Revenue or trade liabilities?

Casati

https://www.boards.ie/discussion/comment/118895905#Comment_118895905

Converting into a pension is likely the best way forward, there are very generous allowances for company directors. You can research a lot of this on the revenue website

C3PO

https://www.boards.ie/discussion/comment/118891577#Comment_118891577

This answer is exactly why you shouldn’t come onto an internet site looking for advice on important revenue related matters! Talk to an accountant!

Jim2007

https://www.boards.ie/discussion/comment/118896920#Comment_118896920

The company is being dissolved, the Revenue are not that dumb.

Stanford

https://www.boards.ie/discussion/comment/118896035#Comment_118896035

These must be discharged first before any attempt at winding up, curious that OP hasn't answered this question.

daludo

Hi Stanford

Sorry for the delay in getting back on here. The company has little revenue liabilities, zero bank liability and approx 1k trade liabilities.

daludo

kaymin

https://www.boards.ie/discussion/comment/118903563#Comment_118903563

Does that prevent a payment into a pension scheme? I don't think so.

Special Contributions to a Directors Pension.

One unique benefit for directors is that they can buy back service.

And this can be done up to 40 years!

It’s a big advantage as it allows directors to quickly catch up on lost years.

And it can be done as a large one-off contribution through the company.

https://www.thepensionstore.ie/how-much-can-a-company-pay-into-a-directors-pension-in-ireland/

BingCrosbee

Don’t go near an accountant. I’ve been running businesses for the past 30 years and I pay little or no tax based on claiming fictitious expenses. It works every time. Give them a small bit to keep them happy. I am qualified in Finance and claim for everything, especially VAT.

Jim2007

https://www.boards.ie/discussion/comment/118904492#Comment_118904492

Since neither the company nor the job still exists it will be seen as a scheme to evade taxes and it will be challenged, it the TI is on the ball.

[Deleted User]

"... and I pay little or no tax based on claiming fictitious expenses. It works every time..."

Until it doesn't.

"I am qualified in Finance..." - How about elaborating? QFA...?

kaymin

https://www.boards.ie/discussion/comment/118906070#Comment_118906070

You're giving incorrect advice. For one, the company still exists and the poster is still employed and working for the company though not as much as previously. Secondly, buying back service via an executive pension scheme is not tax evasion.

What are the benefit of an Executive Pension Plan:

The limits on contributions to an Executive Retirement Plan are significantly greater than a Personal Pension. For example, if you are only commencing your retirement funding now but you may have your company established with a number of years, the company will likely be able to contribute a multiple of your salary into your retirement plan in order to buy back the service you missed. Where you are the owner of the business, this funding ability can be utilised as a tax-efficient method of taking cash from the business.

https://eolasmoney.ie/retirement-planning-for-company-owners-directors/

Casati

https://www.boards.ie/discussion/comment/118908021#Comment_118908021

I know people that did this prior to (i.e a year or two) shutting down their company and retiring and it was 100% above board with revenue. Obviously you can't do if the company has been dissolved but the OP I dont think ever mention closing the company and said it would continue to have some revenue. Its definitely something I would be looking into

daludo

Back again, forgive my ignorance on this topic but is reverting to being a sole trader an option here??