Tax Efficient Options For Multinational Sector Employees

Last week I shared the 2nd article in a series of financial advice for those working in the multinational sector.

Week 1 focused on #investment alternatives for those who have built up money through stock options.

Week 2, I shared some information on #pension options for multinational sector employees.

This week I share a number of #tax-efficient options available for multinational sector employees.

The first one is pretty straightforward, it's a personal pension contribution.

More than likely there should be a company pension scheme in place.

So, you can make an employee contribution or an additional voluntary contribution to your pension scheme and claim tax relief, or income tax relief on the money that you're contributing to it.

It's always worth looking at the retirement projection and if there is surplus cash available you can increase your pension contribution and claim the tax back.

The second option is the employment investment and incentive scheme and that is done separately from your company, it's done on a personal basis.

You invest in a basket of companies on a 4-7 year timeline and typically your investment serves as a type of funding for companies who are scaling their business.

You get income tax relief on the money contributed but like anything you need to be aware of the risk level and the terms and conditions of the investment.

The third option is more related to children and dependents.

If you take a simple equation if you add the value of your home or property, your pensions and your savings or deposits and take that as X in the equation.

Then if you take the number of children you have and multiply that by 335,000 and that's Y.

If X is greater than Y then your children and dependence will be liable for inheritance tax and perhaps by the time that comes around it could be a substantial amount.

From a tax planning point of view, there are insurance policies that will cover inheritance tax.

The last aspect then is to do with the small gift allowance. You can gift anybody €3,000 a year tax-free.

From the point of view again of children or dependents trying to pass money down in a tax-efficient way, you can set up a long-term savings plan whereby you gift €3,000 a year.

Over time that will build up to be a significant amount and can be used for anything from education fees to maybe helping with a deposit on a house in the future but even at the end of it, it will be tax-efficient inheritance or money passed down to children.

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