Investment Breakfast,

Brendan Twohig, AITI

Clayton Hotel, CorkThursday, 23rd February, 2017

TAX PLANNING

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Recent Trends in Tax Planning:

• Corporate Investments – 25% & CCS & Protection - v - Pension Fund

• Innovative Succession Planning coming back– Share Capping

– Partnerships / Joint Names

– Selling v Gifting Businesses / Assets

– Buying Farms as Wealth Transfer Method

– S.60 v S.73 Policies

– Small Gift Exemption - €3000 x ?

• CAT – waiting for better?

TAX PLANNING

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CAT Planning: - Is Waiting an option?

Tax-Planning

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Example:

• Why hold Investments in this manner?

Tax-Planning

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Tax-Planning

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Example cont…:

• Are they nearing Retirement?

Tax-Planning

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Example 1 cont…:

• They could convert €1m in investments into €1m Pension Fund

• Then sell shares to Son Co. for €1m and pay no tax due to S.598 RR

Tax-Planning

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Example 1 cont…:

• They could convert €200k in investments into Pension Fund

• Then sell shares to Son Co. for €1.8m and claim both RR & ER

(€1.8m - €1m linked to trade so full RR, €800k covered by ER so 10%)

Tax - Planning

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CGT v Income Tax – CGT Losses Influence

• Chasing gains v income / Incorporations / Sale to Own Companies

• Impact of DIRT changes?

• Remember CGT Losses can be complicated– S.555 for sale of S.23 properties

– Can’t group-relieve Capital Loss

– Restricted if Debt Release

– Connected Party ring-fencing

– CAN NOT CARRY BACK CGT LOSS

Tax - Summary

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Tax Planning

• Same old messages

1) Never too early to start planning

2) Don’t under-estimate the small savings – SGE classic example

(Don’t try to find a way to save €100k – find 100 ways to save €1k)

• Importance of Big Picture / Long-term Objectives

© M.K.Brazil

E-mail: brendantwohig@mkbrazil.com

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