784C Approved minimum retirement fund

Summary

This section previously set out the consequences of an option (the ARF option) made by an individual under section 784(2A) to have the value of his or her annuity fund, net after any sum taken in part commutation, transferred to himself/herself or to an approved retirement fund (ARF).

Previously, unless the individual had a guaranteed annual pension income of at least €12,700 from an existing pension payable for life (specified income) at the time the ARF option was exercised a maximum “set aside” amount of €63,500 of the net fund (or the whole of the net fund where less than this amount) had to be transferred to an approved minimum retirement fund (AMRF) or used to buy an annuity.

An AMRF automatically became an ARF when an individual became entitled to the required level of specified income at any time after exercising the ARF option, reached the age of 75 years, or died.

The same exemption of income and gains, as well as the taxation treatment of distributions, as apply in the case of ARFs (see section 784A) also applied in the case of AMRFs.

However, section 14 of the Finance Act 2021 removed the AMRF conditions from the ARF option. The section also repealed subsections 2 to 7 of section 784C, with effect from 1 January 2022. It also inserted a new subsection 7A which legislates that on 1 January 2022 any AMRFs automatically become an ARF and the legislative rules applying to ARFs will apply to those funds accordingly.

Details

(1) An “approved minimum retirement fund” (AMRF) is a fund which is held and managed by a qualifying fund manager (within the meaning of section 784A) and which complies with the conditions in section 784D.

On 1 January 2022 an AMRF on that date will become an ARF and section 784A, which sets out the taxation treatment which applies to ARFs, and subsections (1) and (5) of section 784B, which sets out the conditions relating to ARFs, shall apply accordingly.

Relevant Date: Finance Act 2021