Pensions - Personal Fund Threshold Notification

Section 787O of the Taxes Consolidation Act (TCA) 1997 (as amended by section 18(2) of the Finance (No. 2) Act 2013) provides, with effect from 1 January 2014, for a reduction in the generally applicable maximum tax-relieved pension fund at retirement (known as the Standard Fund Threshold or SFT) from €2.3 million to €2 million. The legislation (section 787P TCA 1997) also provides for an individual who has pension rights in excess of this lower SFT on that date to protect those rights by claiming a Personal Fund Threshold (PFT) up to a maximum of €2.3 million from the Revenue Commissioners.

Revenue is in the process of developing a new electronic PFT notification facility and the relevant legislation (section 787P (2)(b) TCA 1997) requires a PFT notification to be made electronically, within 12 months of the new facility being made available.

Regardless of this 12 month notification period, where an individual becomes entitled to a pension benefit on or after 1 January 2014 (e.g. through retirement) and before the electronic notification facility is in place, in circumstances where he or she would be claiming a PFT, the PFT notification must be submitted to Revenue prior to the benefit arising. In such circumstances, a paper Personal Fund Threshold Notification Form should be used to claim a PFT.

The form (including general guidance on applying for a PFT) is now available on the Revenue website at: Taxes & Duties - Income Tax - Forms - Claim Forms.

An individual who holds a PFT issued in accordance with the legislation as it applied prior to Finance (No.2) Act 2013, retains that PFT and there is no need to make a new application to Revenue.

30 January 2014