Time is running out to claim your Personal Fund Threshold
The Finance (No. 2) Act 2013 reduced the Standard Fund Threshold (“SFT”) from €2.3 million to €2 million with effect from the 1st of January 2014. This was the second such reduction in the SFT within 3 years.
If the value of all pension benefits at retirement is in excess of this SFT, an individual will be subject to tax on the excess for pension benefits which have been crystallised.
Individuals whose un-drawn pension benefits in Irish pension arrangements which have a capital value (when combined with pension benefits that have been accessed and / or transferred overseas since the 7th of December 2005) at the 1st of January 2014 in excess of €2 million are able to protect the higher capital, up to an amount not exceeding the previous SFT of €2.3 million, by claiming a Personal Fund Threshold (PFT) from the Revenue.
The PFT notification must be made electronically before the 1st of July 2015. The PFT notification is a personal tax declaration and you or your accountant must make the application through the “Revenue On-Line Service” (ROS) or through the “PAYE Anytime” which are accessed on the Revenue’s website, www.revenue.ie.
The PFT is calculated by taking the sum of the capital values on the 1st of January 2014 of an individual’s pension benefits (including those crystallised and uncrystallised). Where on the 1st of January 2014 the overall capital value of an individual’s pension benefits exceeds the SFT of €2 million, that higher amount will be the individual’s PFT.
Please note that the provision of this product or service does not require licensing, authorisation, or registration with the Central Bank of Ireland and, as a result, it is not covered by the Central Bank’s requirements designed to protect consumers or by a statutory compensation scheme.
The information contained herein is based on Harvest Financial Services Limited’s understanding of current Revenue practice as at May 2015 and may change in the future.