24.3% Fixed Return Bond

Fixed Return Bond

Interest rates are expected to remain low in the Euro zone for the foreseeable future. Many investors still need to generate an annual income from their investments and this is increasingly difficult in the low rate low yield environment especially ARF clients. While the returns may be available from equity markets, many investors are anxious about investing directly in to equity markets.

One solution to this investment dilemma is a Structured 24.3% Fixed Return Bond which pays a fixed return of 24.3% (4.05% paid out each year) regardless of the performance of the financial markets or the performance of the underlying investments.

This income feature is very useful for investors seeking:

  • Investment Income – Investors in this Bond receive a guaranteed annual income of 4.05% paid out each year.
  • A Hedge Against Market Risk/Capital Loss – if the underlying investments have fallen at maturity, the fixed return of this Bond will have the effect of reducing the product loss.

The underlying investments are international equity indices:

  • The Eurostoxx 50 Index
  • The S&P 500 Index
  • The FTSE 100 Index
  • The Nikkei 225 Index

The Bond provides soft capital protection, i.e. investors will receive back their initial capital in the event that none of the 4 indices has fallen by -35% or more at maturity. If any of the 4 indices has fallen by -35% or more at maturity, investors will receive the performance of the worst performing index, no matter how much it has fallen.

The term of the investment is 6 years however there is access to your capital during the term. The investment is available to pension, Approved Retirement Funds, personal and corporate funds. Closing date is 28th February 2018.

If you are interested in finding out more about this investment please contact us on 01 2375500 or email justask@harvestfinancial.ie and we will explain more about the investment and discuss if it is suitable for your portfolio.


Retirement Relief

How to Fund for Education - Financial Advice- Pension Advice


For many business owners the value they have built up in their business , alongside their pension fund, will form the basis of their retirement plan. The generous tax relief available on contributions to the pension plan are well known and understood but what reliefs are available for your business?

Retirement relief is a relief from capital gains tax (CGT) available to individuals who dispose of all or part of the ‘qualifying assets’ of their business.

Retirement Relief may apply to business owners who either sell or gift their business where a gain has arisen on its disposal. This relief allows an exemption from Capital Gains Tax (CGT) at 33%.

Contrary to its title “Retirement Relief”, you do not actually have to be retiring to avail of this relief. Below is a very high level detail of some of the conditions:

  • Owner must have reached their 55th birthday at the time of disposal
  • Assets disposed of must be qualifying assets i.e.,
    • Must give rise to CGT if sold
    • Can be Goodwill, land, buildings or machinery
  • Owner must have owned the relevant assets for at least 10 years

Relief from CGT is capped at certain amounts depending on the age of the business owner and the relationship to the recipient as follows:

  • Aged 55 to 66 and disposing to a qualifying child – No Limit
  • Aged over 66 and disposing to a qualifying child – capped at €3 million
  • Aged 55 to 66 and disposing to someone other than a child – capped at €750,000
  • Aged over 66 and disposing to someone other than a child – capped at €500,000

These amounts are not tax free thresholds, retirement relief does not apply where these amounts are exceeded and could be subject to CGT on the entire consideration. Marginal Relief however may apply where the sale marginally exceeds these amounts. Also, a clawback may occur where a child disposes of the assets within 6 years.

Retirement Relief can be very valuable and provide an exemption from CGT for many business owners. This relief, alongside the income and corporation tax reliefs available for pension contributions, can help business owners provide for themselves and their families in retirement.  The above conditions are not exhaustive and we strongly recommend professional advice if you are considering utilising Retirement Relief.

How do I find out more?

To find out more, please contact us on 01 237 5500 or email justask@harvestfinancial.ie and one of our advisors will be in touch.




retirement reliefHarvest Financial Services

What is a Self Administered Approved Retirement Fund (ARF)?

what is an arf pension

What is a Self Administered Approved Retirement Fund (ARF)?

A Self Administered ARF allows you to take control over where these funds are invested. It lets you place some, or all, of your pension fund value, depending on your preference, in a wide range of investments. These could be deposit accounts, a share portfolio, a tenanted property, an investment in a managed fund, or a combination of any or all of these. You are then free to draw a regular income from the fund if you so choose.

What are the benefits a Self Administered ARF?

A self administered ARF gives a variety of benefits to you in retirement including:

  • you have access to a wide variety of investment options and providers;
  • you can make investments that fit your risk appetite;
  • your investments grow free of both income tax and capital gains tax;
  • you choose when to withdraw funds from your ARF and how much you take*; and
  • on death, your ARF passes to your estate.

 *How do I take income from an Approved Retirement Fund?

You are required by the Revenue Commissioners to take a minimum distribution from your ARF annually once you are aged 61 years.

The minimum annual distributions are:

  • 4% if you are not aged 70 years or over for the whole of the tax year and the value of your ARF is less than €2,000,000;
  • 5% if you are aged 70 years or over for the whole of the tax year and the value of your ARF is less than €2,000,000; and
  • 6% if the value of your ARF exceeds €2,000,000.

If you do not take a distribution in any given tax year there will be a tax bill due from your ARF. This is remitted in February of the following year for the imputed tax due on 4% / 5% / 6% of your ARF and based on the value as at the preceding 30th of November.

With effect from the 1st of January 2016 AMRF holders have the option of withdrawing up to 4% per annum of the value of their AMRF at date of drawdown. PAYE will apply to any withdrawal. There is no obligation on AMRF holders to take this withdrawal.

What happens to the Approved Retirement Fund (ARF) when I die?

On your death your ARF can be transferred to your spouse / civil partner tax-free who can continue to manage the ARF investments and take withdrawals.

Alternatively your ARF can be left to your children or other persons subject to income and / or inheritance tax which are summarised below.


What is an ARF

How do I know if the Harvest ARF is suitable for me in retirement?

The Harvest ARF may be suitable for you if you:

  • Would like to have control over the assets in which your ARF is invested.
  • Would like an ARF where there are no allocation rates and no penalties if you decide to change provider.
  • Where the ARF is managed in an entirely transparent manner.

Self Administered Approved Retirement Fund.

ARF or Annuity – which option might suit you best?


What is an ARF Pension?

what is an arf pension

What is an ARF Pension?

An ARF is a personal tax-efficient investment fund into which you can transfer all or part of the balance of your pension fund after you receive your retirement lump sum.

If you would like to have control over how your retirement fund is managed, an ARF might be the best option for you. An ARF allows you to remain invested in the market with the ability to control your investment and take a flexible income in retirement.

An ARF allows you to invest all or part of your pension fund after you retire. You can decide on the type of fund you would like to invest in, and the amount of risk you’re comfortable with. With an ARF you can still withdraw from your fund on a regular or ad hoc basis (subject to income tax and USC. PRSI may also apply). But it’s worth remembering that since your pension fund is still invested, its value may go down as well as up.

Who can take out an ARF?

An ARF is available to members of an Occupational Scheme (assuming scheme rules allow) and individuals that hold a Personal Pension, Personal Retirement Savings Account (PRSA) or Personal Retirement Bond and have reached Normal Retirement Age or have taken Early Retirement.

Approved Minimum Retirement Fund

To set up an ARF you must have a guaranteed pension income of at least €12,700 per annum. This includes a pension or annuity that is guaranteed to be payable for the rest of your life, including any State guaranteed pension. If you do not have this level of guaranteed pension income you must invest €63,500 in an Approved Minimum Retirement Fund (AMRF).

The test does not apply to individuals aged 75 or over, who may invest in an ARF without satisfying the guaranteed income or AMRF requirements. When you reach the age of 75, or upon death, the AMRF automatically converts into an ARF.

What is an AMRF Pension?

An AMRF is similar to an ARF except that the capital invested in the AMRF is not subject to an imputed distribution until the individual is aged 75 years.

The AMRF holder can access up to 4% of the value of the assets each year, irrespective of age as a once-off withdrawal, subject to PAYE. Any distribution taken form the AMRF can be used to reduce the minimum distribution amount from the ARF assets in that year.


Self Administered Approved Retirement Fund.

ARF or Annuity – which option might suit you best?



Financial Market Update January 2018

Financial Market 2018

Market Update January 2018

Given the choice between focusing on the negatives (Trump, Korea, China trade war prospects) or taking a ‘reasons to be cheerful’ approach (corporate profitability, improving global growth scenario), financial markets clearly decided on the latter in 2017, making it a good year all round for investors.  Funds on Harvest’s Recommended List rose by more than 9% on average (in euro terms) over the year as a whole.

Asset valuations, particularly equities, now look quite stretched and the prospect of 2018 being a repeat of 2017 must be viewed as quite slim. While the traditional enemy of investment markets, inflation, looks to be in long term abeyance, there are plenty of other reasons for concern and we would expect bouts of volatility in financial markets to be a feature this year. And we certainly cannot rule out a major correction although we are attaching a lowish probability to such an event for the moment.


All of the major equity markets performed strongly in 2017 and most produced double digit returns over the year. Once again, China led the way with a massive 43% return and the US was no slouch either returning more than 21% in 2017. Europe at 11% looked relatively pedestrian by comparison. However, currency moves were a very significant factor over the course of the year. As the euro gained against most other currencies, euro based investors suffered a considerable degree of dilution when returns were translated back to euro (see table below). In euro terms, the US returned just 6% while the returns from Japan more than halved from 19% to 8%.  Performance data for the major markets is shown below:

2017                            2017 (in euro terms)
US                  +21.1%*                         +6.4%*
UK                  +11.9%*                         +7.7%*
Europe           +11.4%*                        +11.4%*
Japan             +19.1%*                          +8.3%*
Ireland           +9.9%*                          +9.9%*
China             +42.9%*                         +24.6%*

* Source: Financial Express Analytics

Looking out into 2018, we are maintaining our cautious, but not necessarily bearish, view on equities. In terms of new investment in equities, we continue to advise clients to take a phased approach and to lean towards funds with a focus on income. Longer term, we remain most positive on continental Europe and emerging markets. We also added some specialist ETFs and investment trusts to our Recommended List in areas where we see strong long term growth potential such as robotics and biotech.


All investors are aware of the low to zero return from cash deposits, a situation which is unlikely to change for quite a long time to come. In 2017, Harvest launched its Cash Alternative Strategy, an approach which incorporates a range of very low volatility funds offering a return significantly better than cash without involving a high degree of risk. Over 2017, the Cash Alternative Strategy returned 5.1% (at a volatility level of less than 2%). We are strongly of the view that cash rich clients should be looking to switch at least part of their cash holdings into such a strategy.



An upturn in the interest rate cycle is unlikely to be good news for bonds. However, while the US did begin to increase interest rates in 2017, a general round of interest rate increases looks a long way off. That said, we continue to see little value for retail investors in mainstream bond markets. We are continuing to promote exposure to some specialist areas of the bond and credit markets where we still see higher yielding opportunities such as in emerging market bonds and mortgage backed securities.


Property remains one of our favoured asset classes and it is one to which all clients should have a long term exposure in their portfolios. Yields on commercial property are still attractive across most of the developed markets. We favour ungeared or lowly geared pooled investments, particularly those with a visible income stream. Irish residential property is a particular hotspot at the moment, and looks to remain so for at least a couple of years. Harvest plans to bring bespoke opportunities to our  clients over the short term offering exposure to this sector.


As mentioned above, euro-based investors did not fully enjoy some of the stellar returns delivered by world equity markets in 2017 as a consequence of the strong euro. Currencies have probably found their level over the very short term although looking into 2018 a recovery in the dollar looks quite likely. Brexit will probably ensure that a sustained recovery in Sterling does not happen for quite some time yet.

Gold and Oil

For the twelve months of 2017 gold prices rose by double digits in dollar terms but again suffered from currency moves and was down 2% when converted to euros. Further uncertainty this year is likely to be good news for gold and we may even see a partial reversal in the recent dollar/euro trend in 2018. We would reiterate our view that a small exposure to gold in your portfolio is worth considering.  Oil markets have recovered over recent months and a barrel of oil is now trading at $66, up by more than 15% since the beginning of 2017. We see little prospect of a sustained recovery in the near future although rising tensions in the Middle East could certainly counter that.

* Source: Financial Express Analytics


Inflation has not been a factor in markets for quite some time and 2018 is shaping up to be no different. However, experience has taught us that when inflation does reemerge it could do so with surprising strength.

Contact Us

As always, you should only consider the investment views contained in this update in the context of your own attitude to risk and how such choices might impact your Asset Allocation model. Should you wish to discuss your investment portfolio, please contact  us on 01 2375500 or email justask@harvestfinancial.ie.

Terry Devitt
Investment Director 



Warning: Past performance is not a reliable guide to future performance.


This material is not intended to provide advice and is provided for general information purposes only.