Urgent Notification for Business Owners

The Finance Bill 2024 was published yesterday & it contained provision which materially impacts your retirement funding from 01/01/2025.

Since Finance Act 2023, business owners were provided the opportunity to make significant contributions to their Personal Retirement Savings Accounts (PRSA) which for many, afforded them the opportunity to back fund for contributions which perhaps couldn’t be made in the early years of setting up the business.

PRACTICALLY, that meant that business owners with significant funds in the bank, and with one eye on retirement, could make significant contributions to fund their PRSA’s and if they were Company Directors, would receive Corporation Tax relief.

YESTERDAY, Minister Chambers published the Finance Bill 2024, which disappointingly, contained a provision to limit the employer contribution amount to 100% of total emoluments, which is usually defined as salary. This is a huge departure from the previous flexibility of being able to fund up to the Standard Fund Threshold of €2M.

WHAT HAS CHANGED is that contributions to a PRSA greater than their total remuneration will now NOT receive the Tax relief previously afforded and will be treated as a Benefit in Kind as it was prior to the original amendment in Finance Act 2023. In essence, this is a huge step back for the backbone of this economy; the Irish SME’s, family business owners & Company Directors.

ACTION is now required by business owners to swiftly re-assess their current retirement funding strategy and to re-align if necessary, with the current impending change in the legislation BEFORE 31/12/2024.

If you would like to discuss this further, please contact me on 085 866 9813 or michael@lifetimefinancial.ie