Thursday, 22 March 2012
Finance Bill 2012 (Certified Money Bill): Committee and Remaining Stages
Darragh O'Brien (Fianna Fail)
I want clarification on this section, which relates to the increase in the imputed income to 5% or 6% for approved retirement funds, ARF, or a vested PRSA in excess of €2 million. The previous Government introduced the imputed annual distribution on approved retirement funds and it makes sense. There are also significant changes to section 18, resulting in the reduction of the allowable normal retirement fund to €2.3 million. According to the Minister’s statement yesterday, he referred to the provision to mitigate the harsher impact of retirement for certain individuals resulting from the significant reduction to €2.3 million in the maximum allowable pension fund at retirement for tax purposes. Perhaps the Minister can explain how he proposes to mitigate that. In previous years, one could fund up to €5 million and take €1.25 million in tax-free cash. There has been reduced year-on-year. I did not fully understand the detail of how the Minister will mitigate the additional taxes that must be paid.