Tax-free Lump sum pension conundrum

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Cooler_box

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Can someone please clarify what the tax liability is on inherited lump sum pension payments? I'm hearing conflicting views from people. Is one liable for both IHT @ 33% and income tax @ 40%? I find it hard to believe that Revenue would take more than the beneficiary is due.
 
Last edited:
Cooler_box said:
Is one liable for both IHT @ 33% and income tax @ 40%?
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If an Approved Retirement Fund (ARF) is left to a stranger, then the administrator of the fund will deduct tax at the deceased's marginal rate + USC + PRSI (if applicable). The recipient will then be liable to Capital Acquisitions Tax (CAT) on the net proceeds.

Cooler_box said:
lump sum pension payments
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It depends on what exactly you mean and what the circumstances are but you should find the answer here:
 
I did see that article. It appears to suggest the beneficiary gets 27% and revenue get 73%. It seems not only excessive but unfair?
 
Yes, I understand one has to pay taxes but why two taxes on the same asset? Revenue are more of a “stranger” than the beneficiary who was in a committed relationship with her partner and she gets only 1/3rd of her inheritance? Doesn’t sound fair to me.
 
To help answer the question, if the residual ARF is left to a child over the age of 21 it is taxed at a flat 30% and there is no CAT.
 
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