New pension rules have caught company directors on the hop. What are they and how do they work?

PRSA funding changes incentivised company owners/directors to fund their pensions when funds allowed, but it did lead to some 'aggressive tax planning'. Photograph: iStock

With employees still bound by the upper earnings limit for tax relief – €115,000 a year – the big benefit was for business owners, who were able to use the change to substantially boost their pension funding, gaining tax relief in the process. One example cited was a director of a company, who employed one of his children on the minimum wage, and then created a PRSA and funded it with €1 million. Or a wife could be hired on a salary of €5,000 and her pension bumped up.

It is undoubtedly a sharp reduction on the benefit that was previously in place but, as Delaney notes, it is still “very attractive” compared with what an employee is entitled to.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Port of Cork to receive €88.5m finance injectionCapital from the Ireland Strategic Investment Fund will be used to build facilities at Ringaskiddy container terminal
Source: IrishTimes - 🏆 3. / 98 Read more »

Google to make finance advertisers show they have Central Bank approvalTech firm tightening rules in effort to improve fraud prevention
Source: IrishTimes - 🏆 3. / 98 Read more »

Investment funds to escape 6% ‘mansion tax’ as Finance Bill publishedLegislation gives effect to budget measures including income tax and €1.6 billion personal tax package
Source: IrishTimes - 🏆 3. / 98 Read more »

Bridging finance and downsizingIgnoring a legitimate need of customers
Source: IrishTimes - 🏆 3. / 98 Read more »