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Taxes Consolidation Act, 1997 (Number 39 of 1997)

[1]>

784C Approved minimum retirement fund.

(1) In this section, “an approved minimum retirement fund” means a fund managed by a qualifying fund manager (within the meaning of section 784A) and which complies with the conditions of section 784D.

(2) Subject to subsections (3) and (4), where an individual, who has not attained the age of 75 years, exercises an option in accordance with subsection (2A) of section 784, the amount referred to as B in the formula in the said subsection which the person with whom the annuity contract is made shall—

(a) transfer to an approved minimum retirement fund in respect of that individual, or

[10]>

(b) apply in the purchase of an annuity payable to the individual, shall be the lesser of—

(i) the amount referred to as A in that formula, or

(ii) [4]>£50,000<[4][4]>€63,500<[4].

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[10]>

(b) apply in the purchase of an annuity payable to the individual,

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shall be the lesser of—

(i) the amount referred to as A in that formula, and

(ii) an amount equivalent to the amount determined by the formula—

SPC × 52 × 10

where SPC is the weekly rate of State Pension (Contributory), as set out in column (2) of Part 1 of Schedule 2 to the Social Welfare Consolidation Act 2005, payable in the State at the date of the exercise of the option, and where the amount so determined is not a multiple of €100 the amount shall, as the case may be, be rounded up or down to the nearest €100.

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shall be the lesser of—

(i) the amount referred to as A in that formula, and

(ii) €63,500.

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(3) Where the individual has already exercised an option in accordance with subsection (2A) of section 784, the amount referred to as B in the formula in subsection (2A) shall be such amount as will result in the aggregate of the amount required in respect of all such options, in accordance with subsection (2A), to be transferred to an approved minimum retirement fund or applied in the purchase of an annuity payable to the individual being the lesser of—

(a) the aggregate of the amount referred to as A in that formula in relation to each contract, [11]>or<[11][11]>and<[11]

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(b) [5]>£50,000<[5][5]>€63,500<[5].

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(b) an amount equivalent to the amount determined by the formula in subsection (2)(ii) if SPC in that formula was the weekly rate of State Pension (Contributory), as set out in column (2) of Part 1 of Schedule 2 to the Social Welfare Consolidation Act 2005, payable in the State at the date of the exercise of the most recent of the options referred to in this subsection.

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(b) €63,500.

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(4) [13]>(a) Where, at the date of exercise of an option under subsection (2A) of section 784, the individual by whom the option is exercised [8]>is entitled to<[8][8]>is in receipt of<[8] specified income amounting to [6]>£10,000<[6] [18]>[6]>€12,700<[6] per annum, the amount referred to as B in the formula in the said section 784(2A) shall be nil.<[18] [13]>(a) Where, at the date of exercise of an option under section 784(2A), the individual by whom the option is exercised is in receipt of specified income per annum of an amount equivalent to the amount determined by the formula—<[13]<[13]

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SPC × 52 × 1.5

where SPC is the weekly rate of State Pension (Contributory), as set out in column (2) of Part 1 of Schedule 2 to the Social Welfare Consolidation Act 2005, payable in the State at the date of the exercise of the option (and where the amount so determined is not a multiple of €100 the amount shall, as the case may be, be rounded up or down to the nearest €100), the amount referred to as B in the formula in section 784(2A) shall be nil.

<[13]

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(a) Where, at the date of exercise of an option under section 784(2A), the individual by whom the option is exercised is in receipt of specified income amounting to €12,700 per annum, the amount referred to as B in the formula in that section shall be nil.

<[18]

(b) For the purposes of this subsection, “specified income” means a pension or annuity which is payable for the life of the individual, including a pension payable under the [9]>Social Welfare (Consolidation) Act, 1993,<[9][9]>Social Welfare Consolidation Act 2005,<[9] and any pension to which the provisions of section 200 apply.

(5) Subject to subsection (6), the qualifying fund manager shall not make any payment or transfer of assets out of the approved minimum retirement fund [7]>other than—<[7][7]>, including any distribution or amount regarded under this Chapter as a distribution, other than—<[7]

(a) a transfer of all the assets of the fund to another qualifying fund manager to be held as an approved minimum retirement fund, or

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(b) a payment or transfer of income, profits or gains, or gains on disposal of investments received by the qualifying fund manager in respect of assets held in the approved fund to the individual beneficially entitled to the assets in the fund.

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(b) a payment or transfer, on one occasion only, in any tax year (being a year of assessment for tax purposes) to the individual beneficially entitled to the assets in the fund of an amount that does not exceed 4 per cent of the value of the assets of the fund at the time of the payment or transfer.

<[19]

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(6) Where the individual referred to in subsection (2) attains the age of 75 years or dies, the approved minimum retirement fund shall, thereupon, become an approved retirement fund and the provisions of section 784A, subsections (1) and (5) of section 784B and section 784E shall apply accordingly.

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(6) Where the individual referred to in subsection (2)

(a) attains the age of 75 years,

(b) is in receipt of specified income referred to in subsection (4) at any date (in this paragraph referred to as the “first-mentioned date”) after the date of the exercise of an option under section 784(2A) of an amount which would, if the option had been exercised on the first-mentioned date, have resulted in B in the formula in section 784(2A) being nil, or

(c) dies,

the approved minimum retirement fund shall, thereupon, become an approved retirement fund and section 784A, subsections (1) and (5) of section 784B and section 784E shall apply accordingly.

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(6A) Where before the date of passing of the Finance Act 2011, the individual referred to in subsection (2) has exercised an option in accordance with section 784(2A) and the person with whom the annuity contract is made has, before that date, transferred the amount referred to as B in the formula in that section to an approved minimum retirement fund in respect of that individual, subsection (6) shall apply for the period of 3 years from the date of passing of the Finance Act 2011 as if the following paragraph were substituted for paragraph (b) of that subsection:

‘(b) is in receipt of specified income of €12,700 at any time in the period of 3 years from the date of passing of the Finance Act 2011, or’.

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(7) Any assets held as part of an approved minimum retirement fund shall be the property of the individual on whose behalf the fund is held and, subject to the provisions of the Income Tax Acts and the Capital Gains Tax Acts, that individual shall be chargeable to income tax or capital gains tax, as the case may be, in respect of any income, profits or gains arising in respect of those assets or any chargeable gain on disposal of such assets.

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(7) The provisions of section 784A shall, with any necessary modifications, apply to income and chargeable gains arising from, and to distributions in respect of assets, held in an approved minimum retirement fund as they apply to assets held in an approved retirement fund.

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(8) Within 3 months after the end of the year of assessment, a qualifying fund manager shall provide a statement for that year of assessment to each individual for that year of assessment, on whose behalf an approved minimum retirement fund was managed at any time during that year of—

(a) the income, profits or gains and the chargeable gains and allowable losses, as may be appropriate, in respect of the assets held in the approved minimum retirement fund at any time during that year, and

(b) the tax, if any, deducted from such income, profits or gains.

(9) The provisions of subsection (8) of section 784E shall apply as regards an approved minimum retirement fund as if references to an approved retirement fund were references to an approved minimum retirement fund.

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Inserted by FA99 s19(1)(b)(iii). Paragraph (b), other than subparagraph (vi), of subsection (1) shall apply as respects any annuity contract for the time being approved by the Revenue Commissioners under section 784 entered into on or after the 6th day of April, 1999. Special Note: FA13 s17(6) cannot be consolidated but can be construed as: (6) (a) In this subsection— “approved minimum retirement fund” has the meaning assigned to it by section 784C(1); “non ring-fenced amount”, in relation to a vested PRSA, means the amount or value of assets in the vested PRSA that the PRSA administrator can make available to, or pay to, the PRSA contributor or to any other person; “Personal Retirement Savings Account”, contributor” and “PRSA administrator” have the meanings assigned to them by section 787A(1); “relevant option” means an option exercised in accordance with section 772(3A)(a), 784(2A) or 787H(1); “ring-fenced amount”, in relation to a vested PRSA, means an amount retained within the vested PRSA by the PRSA administrator equivalent to the amount which the PRSA administrator would, if an option had been exercised in accordance with section 787H(1), have had to transfer to an approved minimum retirement fund in accordance with section 784C and by virtue of section 787H(3); “specified income” has the meaning assigned to it by section 784C(4)(b); “vested PRSA” means a Personal Retirement Savings Account in respect of which assets have first been made available to, or paid to, the contributor by the PRSA administrator on or after 6 February 2011, and the term “vesting of a PRSA” shall be construed accordingly. (b) Where on or after 6 February 2011 and before the date of passing of this Act one or more than one relevant option is exercised by an individual, or an individual has one or more than one vested PRSA, and in the exercise of the relevant option or options or in the vesting of the PRSA or PRSAs, an amount or value of assets is transferred to an approved minimum retirement fund (by way of one or more than one transfer) or, as the case may be, is a ringfenced amount (in this paragraph referred to as the “relevant amount”, and where this term is used in the context of a ring-fenced amount it shall, where there is more than one ring-fenced amount, be construed as meaning the aggregate of the ring-fenced amounts), then where the individual— (i) has specified income of not less than €12,700 on or after the date of passing of this Act— (I) the approved minimum retirement fund shall thereupon become an approved retirement fund (in respect of which section 784A and subsections (1) and (5) of section 784B of the Principal Act shall accordingly apply), or (II) the ring-fenced amount or, as the case may be, each ring-fenced amount shall thereupon become a non ring-fenced amount, ii) has specified income of less than €12,700 on the date of passing of this Act in circumstances where the relevant amount is greater than €63,500— (I) the approved minimum retirement fund shall, to the extent of the excess of the relevant amount over €63,500, thereupon become an approved retirement fund (in respect of which section 784A and subsections (1) and (5) of section 784B of the Principal Act shall accordingly apply), or (II) the ring-fenced amount or, as the case may be, so much of each ring-fenced amount determined in accordance with paragraph (c) shall, to the extent of the excess of the relevant amount over €63,500 thereupon become a non ring-fenced amount. (c) For the purposes of giving effect to paragraph (b)(ii)(II), where more than one vested PRSA has a ring-fenced amount the individual shall determine how much of each ring-fenced amount shall become a non ring-fenced amount.

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[-] [+]

Substituted by FA00 s23(1)(e)(i). Shall apply as regards an approved retirement fund or an approved minimum retirement fund, as the case may be, where the assets in the fund were first accepted into the fund by the qualifying fund manager on or after 6 April 2000.

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Deleted by FA00 s23(1)(e)(ii). Shall apply as regards an approved retirement fund or an approved minimum retirement fund, as the case may be, where the assets in the fund were first accepted into the fund by the qualifying fund manager on or after 6 April 2000.

[4]

[-] [+]

Substituted by FA01 sched5.

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[-] [+]

Substituted by FA01 sched5.

[6]

[-] [+]

Substituted by FA01 sched5.

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[-] [+]

Substituted by FA03 s14(1)(c)(iv). Shall be taken to have come into force and has effect as on and from 6 February 2003.

[8]

[-] [+]

Substituted by FA05 s21(1)(b)(iii). Applies as respects on or after 3 February 2005.

[9]

[-] [+]

Substituted by FA07 sched4(1)(y). Shall have effect as on and from 2 April 2007

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[-] [+]

Substituted by FA11 s19(2)(b). Shall apply as respects the exercise of an option in accordance with section 772(3A)(a), 784(2A) or 787H(1) on or after 6 February 2011.

[11]

[-] [+]

Substituted by FA11 s19(2)(c). Shall apply as respects the exercise of an option in accordance with section 772(3A)(a), 784(2A) or 787H(1) on or after 6 February 2011.

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[-] [+]

Substituted by FA11 s19(2)(d). Shall apply as respects the exercise of an option in accordance with section 772(3A)(a), 784(2A) or 787H(1) of the Principal Act on or after the date of 6 February 2011.

[13]

[-] [+] [+]

Substituted by FA11 s19(2)(e). Shall apply as respects the exercise of an option in accordance with section 772(3A)(a), 784(2A) or 787H(1) of the Principal Act on or after the date of 6 February 2011.

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[-] [+]

Substituted by FA11 s19(2)(f). Deemed to have effect on and from 6 February 2011 as per FA13s17(5).

[15]

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Inserted by FA11 s19(2)(g). Has effect as on and from 6 February 2011.

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[-] [+]

Substituted by FA13 s17(2)(a). Applies as respects the exercise of an option in accordance with section 772(3A)(a), 784(2A) or 787H(1) on or after 27 March 2013.

[17]

[-] [+]

Substituted by FA13 s17(2)(b). Applies as respects the exercise of an option in accordance with section 772(3A)(a), 784(2A) or 787H(1)on or after 27 March 2013.

[18]

[-] [-] [+]

Substituted by FA13 s17(2)(c). Applies as respects the exercise of an option in accordance with section 772(3A)(a), 784(2A) or 787H(1) on or after 27 March 2013.

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[-] [+]

Substituted by FA14 s19(2)(b). Has effect on and from 1 January 2015.