Finance Bill 2013
With the new Finance Act officially being signed into law, it has become increasingly difficult to keep up to speed with the rules and regulations regarding pensions. We hope that this summary keeps you informed on how the new changes affect you.
The Act, which was signed into law by the President late last month, made a number of provisions which relate to pensions.
Pre-retirement access to Additional Voluntary Contributions (AVCs)
It is good news for anyone who has made AVC’s, as you will have the option to drawdown up to 30% of the value of your fund for the next three years.
This is a one-off option so only one drawdown can be made during the specified period.
Changes to the Approved Retirement Fund (ARF) / Approved Minimum Retirement Fund (AMRF) regime
ARF / AMRF investors are set to have far greater access to ARF income as the Bill has reversed the current €18,000 specified income limit and €119,800 AMRF investment requirement back to the pre 6 Feb 2011 levels of €12,700 and €63,500.
For instance, new retires with ARF options, can have full access to ARF once specified income of €12,700 pa in place. Otherwise, once €63,500 is invested in AMRF.
Taxation of Vested PRSA assets on death
Where assets from a Personal Retirement Savings Accounts (PRSA) pass to a child over age 21, the payment will be exempt from Capital Acquisition Tax (CAT).
This change brings the legislation into line with stated Revenue practice in this area.
Revised rate of USC – income over €60,000 p.a.
Reduced rates of the Universal Social Charge for the over 70’s and medical card holders will no longer apply if the person’s income is over €60,000 p.a.
This change was effective from 1 January 2013.
This article does not constitute legal advice.
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