Achieve Your Financial Goals
Financial Advice For The Self-Employed
At Symmetry Financial Management, we have many self-employed clients who we advise in many areas of financial planning for the future. This can include advice on protection specific to yourself and your business, savings and investments portfolios tailored to suit your risk profile, funds and timeline, and all of the different types of pension plans available to you such as Executive Pensions or Small Self-Administered Pension plans.
Small Self-Administered Pensions (SSAP)
As a company director you can set up a Small Self-Administered Pension. This is a Revenue-approved scheme which is set up by a company for an employee or for a director.
The individual controls how the SSAP is invested. Small Self-Administered Pension arrangements are deemed by Revenue to be “self-administered” where contributions are invested through the Pensioner Trustee rather than going through the normal route of an insurance company.
Small Self Administered Pensions (SSAPs)
Benefits of a SSAP
You can see what assets are in your pension and what all of the associated costs are.
You can easily move your pension from one company to another without having to liquidate assets.
You can transfer the assets to a Self-Administered Personal Retirement Bond in the event of having to make the scheme paid up without having to liquidate any assets.
You can also transfer the assets to a post-retirement self-administered Approved Retirement Fund (ARF) without having to liquidate the assets.
You can borrow from your SSAP to purchase an asset.
Financial Planning for Tradespeople
It’s important for tradespeople to seek help with your financial planning to make sure you have the appropriate cover for the risks of your role, and to ensure that you and your family are always financially protected.
At Symmetry Financial Management, we work with a wide range of tradespeople and our experience helps us to really understand each client’s occupational requirements. Because some of our most successful clients are tradespeople, we know that sometimes you just need a little guidance to really excel.
So we’re here to help.
We can advise you in all aspects of your financial planning from life and serious illness cover, to mortgages, and from pensions to savings and investments. Because we have the experience, we know who the best insurance providers are for the risks of your occupation.
Looking After Your Interests
Working in the trades industry, there is always a chance you will be unable to work for a time due to illness or injury. That is why together we will look at salary protection to cover you should you ever need it. The right life insurance policy is just as important to protect your family.
We’ll cover this with you and more.
We’ll also review your current situation to help you to best structure your finances and advise you on the right pension plan to provide you with the income you need during your retirement years.
This also covers setting up savings and investment plans if your current financial situation allows.
Property Investment for Tradespeople
Property investment for tradespeople is a great opportunity for you to use your skill set and network to your advantage. You have a distinct advantage over the average person when purchasing an investment property. With your trade skills, knowledge, and network, you are in a far better position to affordably renovate properties to increase their market value.
Doing this will help you maximise the profit you take in from any property you invest in, and for rental properties, it can minimise the cost of fixing any problems that may arise.
The benefit you have is that you can stress the asset, and maximise your returns.
Property Investment – How To Buy
Once you’ve decided that you want to invest in property, the first decision you must make is who or what entity should acquire the property.
Generally residential property is purchased directly by individuals either solely or jointly with others. It is usually acquired for the long term with a view to providing assets/income for the individual’s retirement.
Companies can be used to purchase property
Properties acquisition can be a good form of investment for after-tax profits retained in a company.
If these profits are taken out of the company by the individual owners, almost half of it would be due to Revenue by way of taxes. Companies however, pay tax at a rate of 25% on rental profits. In addition, there is also an extra tax charge on undistributed profits.
Purchasing property as an asset
Property is an important asset class which has delivered very attractive returns to investors over longer terms. There is a very wide range of options available to investors seeking exposure to property but investors should be aware of the additional risks associated with liquidity and gearing in relation to this asset class.
Purchasing property through pension
Pension rules allow the use of retirement funds for the purchase of property assets in individual, co-ownership, or syndicated funds.
Reasons to invest in a pension property
- All income and gains within pension schemes are exempt from income tax and capital gains tax (CGT), so the rental income is not subject to income tax nor will CGT be payable on the sale of the property.
- You can gain superior net yields using the power of Compound interest.
- You can pick the property you want to purchase with your pension.
- You have control over every aspect of your pension.
- At retirement, you can take 25% of the value of the pension fund as a lump sum, of which €200,000 is tax free.
- The property can transfer to a self-administered ARF and the rental income can contribute to your income in retirement – drawdowns from which are subject to PAYE.
Business Protection Insurance
Business protection insurance is for individuals who want to ensure their business or investment property will provide their family with financial security.
Business protection can provide the funds needed to:
- Buy out partner shares of the business
- Ensure their family receives a fair price for their shares
- Ensure business partners retain ownership and control if this is the intention
- Avoid the need for co-directors of the deceased to take out personal loans
Below are 3 types of insurance available for your business, to protect against the death or serious illness of a co-director, partner or key person.
Types of Insurance:
1. Co-Director Insurance
The sudden loss of a director through death, or ill health can have very negative consequences on a business. Co-Director Insurance will allow the company to buy a director’s shares from their next-of-kin if these unfortunate events occur.
This will bring stability to the business, as the remaining directors gain full control of the company. And it could be a good option for the family of the deceased, who may not have the desire or expertise to take on this role.
Co-Director Insurance can be taken out at any stage of your company’s lifetime. Co-Director Insurance can be taken out by the directors of a company of any size.
2. Partnership Insurance
The death of a partner can be an extremely distressing and traumatic experience for those involved. As well as that, this unfortunate event might jeopardize the financial security and stability of the partnership.
The remaining partners may be obliged to pay a capital sum to compensate the deceased estate for his/her stake in the partnership. Partnership Insurance can release the funds to make this possible, and allow the partnership to continue without the involvement of next of kin.
The remaining partners can decide to continue the business or cease trading and at the same time ensure their partners successor and estate are looked after financially.
3. Keyman Insurance
A Key Person Insurance policy is designed to allow a business to insure itself against the risk of key people being unable to work due to suffering a critical illness or premature death.
The payment from the insurance policy to the business would provide replacement cash to support the business while it realigns itself and gets its business back on track.
The sum insured for the cash lump sum would be calculated as the potential loss of revenue that the business would suffer if they lost the key person. You can take out Key Person Insurance at any stage of your company’s lifetime.
For the self-employed, it’s far too easy to let your busy schedule take over and to put pension planning on the long finger. Here at Symmetry Financial Management, we make it easy for you. Our team will meet you at a time and location that suits you, and work through all the pension options available to you.
We will assess your risk level and your goals, and advise you on the fund choices available as well as recommending the best pension plan and provider for you.
Once set up, we can manage your pension for you and review it regularly with you to ensure it your plan always fits your needs.
Reducing Your Tax Bill
If you are self-employed you are probably looking at ways to reduce your tax. One way to do this is to contribute to a pension.
You can claim back either 20%, if you are on the standard rate tax band, or 40%, if you are on the higher rate tax band on the premiums. There are limits on the tax relief which depends on your age and earnings. There is also a cap on the salary you can claim your tax relief on. You are also planning for your retirement by paying into a pension.
The benefits in a pension also grow tax free. You can also make a pension contribution in a year in respect of your earnings from the previous year. The contribution must be made by 31st October or the online cut-off date (usually the 2nd week in November) in doing your tax returns online.
Limits for tax relief on pension contributions
Tax relief for employee pension contributions is subject to two main limits:
- an age-related earnings percentage limit
- total earnings limit.
Age-related earnings percentage limits
This relief is only from the employment in respect of which the contributions are made.
|60 or over||40%|
Total earnings limit
The maximum amount of earnings considered for calculating tax relief is €115,000 per year.