AMRF and Income Limit €12,700

D

donalfff

Registered User
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hello,

a friend has an annual pension of c€12,400 pa and her option with her small AMRF (c€18,000) is take 25% tax free plus 4% drawdown (not interested in an annuity). her husband has a pension in excess of €60,000. she has no entitlement to a social welfare pension.

ideally she would like to take the 25% tax free and draw down the balance of the AMRF over 2 years as she would have little or no tax liability.

any way to bridge the gap or can her husbands income be considered?

thanks
 
I think you're getting a bit mixed up with your terminology. An AMRF is a vehicle you go into AFTER you've retired. Your query suggests that she has a fund in some sort of a pension plan which she has not yet retired. What type of pension plan is it? There are "trivial pension" rules but I suspect that she may not qualify.

After taking her tax-free lump sum, she could use some of her residual fund to buy a small annuity to pay her €300 a year to bring her up to the €12,700 limit. Cost of this would be dependent on her age and state of health. She can then withdraw the balance.

Her husband's income cannot be considered in these calculations.

Regards,

Liam
www.ferga.com
 
Thanks for coming back.

She's actually retired on the €12,400 pension but has made no decision yet regarding the AMRF.

So solution seems to be take the 25% tax free, purchase an annuity for approx. €300+ to bring her over the €12,700 threshold and tax the residual amount in the fund as income subject to 0/20% tax and Class S Prsi?

Just thinking, if she got a seasonal part time job which gave €300+, would that and her existing pension , qualify her as being over the €12,700?

thanks

Donal
 
If she already has an AMRF with the €18,000 in it, then she doesn't have the option to take a further 25% as a tax-free lump sum. She would have already had the option to take a lump sum from whatever pension arrangement was retired to fund the AMRF before the balance went into the AMRF.

Income that qualifies towards the €12,700 annual limit must be guaranteed income for life. Employment income is not guaranteed for life and would therefore not qualify.
 
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