Question asked:


Hi Alan

My client is looking to acquire another company. As well as buying the shares from the existing shareholders the client is proposing that the company he buys pays the existing directors and shareholders a termination payment and avail of the tax free Basic Exemption amount under S.201

My questions are:
Is there any issues with paying a termination payment to a director in this circumstance. Obviously they cannot avail of Statutory redundancy as they are not paying Class A PRSI but is there any reason why they cannot avail of the Exemptions in S.201 or Schedule 3?

If we want to pay the increased basic exemption what approval from Revenue do we need to get? Do we need any approval to pay the basic exemption?

In calculation of the Basic exemption does it have to be full time to count as a year. In this case one of the directors worked on and off for 15 years, then didn’t work for 3 years then worked full time for 7 years for this company. For the calculation of the basic exemption amount do we use 7 years or is it 22 years (7+15)?

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Asked on 25 June 2013 1:47 pm