Revenue Note for Guidance

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Revenue Note for Guidance

787P Maximum tax-relieved pension fund

Summary

This section provides for the “maximum tax relieved pension fund” which will be either the standard fund threshold (SFT) of €2m or, where applicable, the personal fund threshold (PFT). Certain notification requirements must be met for a PFT to apply. Revenue will issue a certificate to the individual generally within 30 days of notification, stating the amount of the PFT. Revenue may withdraw a PFT certificate and issue a revised one (if appropriate) if it transpires that the information contained in the notification is incorrect or that the individual is not entitled to a certificate.

Details

(1) An individual’s maximum tax relieved pension fund shall not exceed the SFT (defined as an amount of €2m) or a higher amount known as the PFT.

A PFT can only apply where:

  1. the conditions in subsection (2) are met and Revenue has issued a certificate in accordance with subsection (7) or a revised certificate in accordance with subsection (8), or
  2. Revenue has issued an earlier PFT certificate – i.e. a certificate issued in accordance with the legislation as it applied prior to the passing of Finance (No.2) Act 2013 (generally known as 2005 or 2010 PFTs).

(2)(a) An individual applying for a PFT is specifically required to request and get, from the administrator of each pension arrangement of which he or she is a member, a statement–

  1. certifying the individual’s pension rights (i.e. his/her crystallised or uncrystallised pension rights in respect of the arrangement) on the specified date calculated in accordance with the requirements of Chapter 2C and Schedule 23B,
  2. in the case of defined benefit arrangements, certifying the annual amount of pension accrued up to the specified date, calculated in accordance with the requirements of Chapter 2C and Schedule 23B
  3. in the case of occupational pension schemes generally, specifying the Revenue Approval Reference Number of the scheme.

(2)(b) A PFT notification has to be made on a new electronic application system being developed by Revenue. The time frame for notification is within 12 months of the electronic system being made available. However, regardless of this 12 month period for notification, where an individual becomes entitled to a pension benefit after 1 January 2014 (e.g. through retirement) and before the electronic system becomes available in circumstances where he or she would be claiming a PFT, the notification must be submitted to Revenue prior to the benefit arising. In such circumstances, a paper application form (Personal Fund Threshold Notification) which is available on the Revenue website www.revenue.ie should be completed (see subsection (4)). The following particulars are required on a PFT notification –

  1. the individual’s name, address, telephone number and PPSN, and
  2. for each pension arrangement in respect of which the PFT arises,
    • the administrator’s name, address and telephone number,
    • the name and reference number of the arrangement,
    • whether the arrangement is a defined benefit or a defined contribution arrangement,
    • the amount of the individual’s pension rights under the arrangement on 1 January 2014 as certified by the administrator in accordance with subsection (2)(a),
    • in the case of a defined benefit arrangement, the annual amount of pension accrued up to 1 January 2014 as certified by the administrator in accordance with subsection (2)(a), and
    • any other information and particulars that Revenue may require for the purposes of Chapter 2C and Schedule 23B

(3) There is an obligation on both the administrator and the individual to retain the certifying statements referred to in subsection (2)(a) for 6 years and make them available to an officer of the Revenue Commissioners on being required by a notice to do so. In the case of the administrator it is for 6 years after the date of the (latest) BCE arising under the arrangement. In the case of the individual it is for 6 years after the date of the final BCE relating to all of his/her pension arrangements.

(4) Where a PFT notification has to be made before the electronic facility mentioned in subsection (2)(b) is available, it must be made in a manner approved by Revenue (i.e. by way of a paper application as referred to earlier).

(5) A PFT notification made by electronic means is deemed to include a declaration that the notification is correct and complete.

(6) The administrator of each pension arrangement of which an individual is a member must comply with a request from the individual to provide a statement referred to in subsection (2)(a).

(7) Revenue will issue a certificate to the individual following receipt of a notification stating the amount of the PFT. This will generally be provided within 30 days of receipt of the notification (but may take longer depending on the circumstances).

(8) Revenue can withdraw a certificate and, where appropriate, issue a revised one where it transpires that the information included in the notification is incorrect or the individual is not entitled to a PFT.

Relevant Date: Finance Act 2020