Where the main asset is the family's trading company it is important to extract value from the company to enable proper provision for the spouse who may not be the key driver of the business. This needs to be planned in such a way as to have the least negative impact on the company' long-term ability to carry on as a going concern.
If the business is profitable and has sufficient cash and distributable reserves, a couple of tax-efficient options may be considered, as follows:
| Option | Details |
| Make an ex gratia termination payment | If the recipient spouse works in the business or is a director, it may be possible for the company to make an ex gratia termination payment to them tax efficiently (TCA 1997, s 201).
Depending on the annual salary earned by the recipient spouse and the years of service, a tax-free |
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Web page updated on 17 Mar 2025 13:25