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Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance (No. 2) Bill 2023: Committee Stage (7 Nov 2023)

Michael McGrath: This section amends section 787K of Part 30 of the Taxes Consolidation Act to remove the upper age limit on personal retirement savings accounts, PRSAs. The amendment implements a recommendation of the report of interdepartmental pensions reform and taxation group with a view to improving and simplifying the pension regime in Ireland and leading towards a whole-of-life PRSA. A PRSA is a...

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance (No. 2) Bill 2023: Committee Stage (7 Nov 2023)

Michael McGrath: The changes that were introduced in 2013 still apply. In 2013, it was deemed that this was a form of tax planning which allowed PRSA holders to pass large funds on to their spouse, civil partner or dependants with favourable tax consequences. In order to address this where a fund has not commenced benefits and the PRSA holder reaches an upper age limit of 75, the fund is deemed to vest, at...

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance (No. 2) Bill 2023: Committee Stage (7 Nov 2023)

Pearse Doherty: ...now, perhaps a note could be provided between now and Report Stage. It is a question of what Michael Noonan did when he was Minister for Finance, which was to stop that tax planning where a PRSA owner never took the benefits from the PRSA and therefore the taxes were avoided and the assets were passed tax-free to a surviving spouse.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance (No. 2) Bill 2023: Committee Stage (7 Nov 2023)

Damien English: My understanding is that if somebody was locked in from the age of 76 and needed to draw more out of the PRSA fund at 76 years of age for whatever reason, they could not draw on it because they were in the payment plan already. They were very restricted if they needed it for-----

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance (No. 2) Bill 2023: Committee Stage (7 Nov 2023)

Damien English: My understanding was that it was to give the owner of the PRSA more time to draw down the percentages they want to draw down. Is that not correct? They do not have the rush to take it down, if they are working till 70 or longer than they used to work. That is my understanding of it.

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach: Finance (No. 2) Bill 2023: Committee Stage (7 Nov 2023)

Pearse Doherty: No. Three things happened to create a disincentive to hold on to a PRSA until the age of 75. The first was a crystallisation event. The second was the imputing. The third was that the person was locked out. However, if the person is no longer locked out, is the Minister not taking away one of the big disadvantages from this type of tax planning? We need to bear in mind that many people...