Hi,
A colleague has very recently reached his retirement age but had been diagnosed with terminal cancer. He has a sum of money saved in a retirement fund which, as he understands it, if he leaves the fund as is and doesn't purchase an ARF before he passes the entire amount will transfer to his estate tax free. On the other hand if he purchases an ARF, 30℅ tax is payable before the balance is paid to his children. Is this correct?
It appears to be more tax efficient to leave things as they are and not purchase the ARF but the question is, given he has officially passed the specified retirement age (agreed age was 72 and he has just turned 73) how long will revenue allow the fund to remain in limbo before they force a draw down in whatever form that takes?
Thanks
A colleague has very recently reached his retirement age but had been diagnosed with terminal cancer. He has a sum of money saved in a retirement fund which, as he understands it, if he leaves the fund as is and doesn't purchase an ARF before he passes the entire amount will transfer to his estate tax free. On the other hand if he purchases an ARF, 30℅ tax is payable before the balance is paid to his children. Is this correct?
It appears to be more tax efficient to leave things as they are and not purchase the ARF but the question is, given he has officially passed the specified retirement age (agreed age was 72 and he has just turned 73) how long will revenue allow the fund to remain in limbo before they force a draw down in whatever form that takes?
Thanks