Tax Efficient Savings Plans

Tax Efficient Savings Plans

Regular Savings Plan With a Twist

If you are looking to combine a long-term savings product with a tax efficient strategy, then a tax efficient regular savings plan may be right for you.

This savings product is a regular savings plan (see previous section) but with a difference. Depending on your personal circumstances your regular savings plan can be tailored to utilise certain tax advantages depending on the purpose of your savings goal.

However you need to be aware that your capital is not guaranteed and at maturity, you could receive an amount less than your original investment.

Child Savings Plan

Many parents choose to incept a savings policy to provide for a child’s future. By choosing to assign the savings plan to the child, you can make full use of the annual gift tax exemption of € 3,000 from any one individual (€ 6,000 from a married couple). By assigning the policy to the child, the child will be entitled to the proceeds without reference to Capital Acquisitions Tax.

Funding Gift Tax with a Life Assurance Savings Plan

Section 73 of CATCA 2003 is the gift tax relief twin of Section 72 inheritance tax relief. It allows, in certain circumstances, a disponer to build up a capital sum in a life assurance savings plan over a minimum period of 8 years, to be used to discharge a donee’s  gift tax liability in relation to a lifetime gift (as opposed to an inheritance) made by the insured, without causing another taxable gift to the donee.

An important point to note is that the use of a life assurance savings plan, expressly effected under Section 73 CATCA 2003, does not oblige the insured to use the plan proceeds to pay gift tax at any time in the future. It becomes an option after eight years, if all of the Section 73 qualifying conditions have been met.

Section 73 savings plans can facilitate the early (after eight years) transfer of illiquid assets to the next generation, and may also be an option for those who are unable for health reasons to obtain Section 72 life assurance cover.

Regular Pension Contributions

Regular monthly pension contributions continue to be the most tax efficient regular savings plan of all. This is covered in detail in our Retirement Planning section.

Benefits of a tax efficient regular savings plan:

√        Varied choice of funds √        Utilising certain tax reliefs
√       Opportunity to generate a real return and beat inflation √        Can be tailored to suit individual risk profile

How abm financial advisers can help

  • Superior advice you can rely on.
  • Your adviser will be both a fully qualified accountant in addition to being a fully qualified financial adviser (QFA).
  • No complicated, technical jargon – simple, clear and easy to follow information

How can I get further information on tax efficient regular savings plans?

For further information on taking out your tax efficient regular savings plan, call our team today on 021 427 7000 or email us.

Warning: The value of your investment may go down as well as up.