Redundancy, voluntary severance, ex gratia payments, involuntary severance, pay in lieu of notice, holiday pay, golden handshake, they are all payments for past service with an employer and are paid as a lump sum when you stop work.
If you are considering an employer redundancy lump sum, you may need independent advice on the different tax exemptions/reliefs which will determine how much tax you pay and how much you will receive tax-free.
It can be hard to find an advisor that really knows this area and often there is a short time limit to make such a big decision, so only take advice from people that know this area well, making a mistake can be very costly.
In fact, it is not unusual for several people in the same employer to opt for the same decision even though they could have totally different circumstances, and they may not benefit equally.
Financial Architects have been doing this for years and in fact, have found that some employers do not provide any advice in this area. Some also provide advice and get it wrong, which can be costly to you.
As Certified Financial Planners, we have the technical knowledge in this area which is really what you will need to maximise your tax-free lump sum.
Redundancy and tax treatment:
There are different exemptions for tax, so it is very important to speak to someone that understands your options.
The exemptions are:
- Statutory redundancy
- Standard exemption
- Increased exemption
- Standard Capital Superannuation benefit
(All of the above are tax breaks which will reduce the amount of tax you will pay on your lump sum).
We will discuss the different options available and whether or not you should waive your right to a tax-free lump sum from your pension.
Contact us today on 01 8027669 / 70, or email email@example.com to arrange an appointment or screen share to discuss.
Financial Architects Ltd t/a Financial Architects is Regulated By The Central Bank Of Ireland.