Large pension pots face tax hit in next Budget
Related Articles
PEOPLE with large pension investments who are considering retiring have been advised to move quickly.
Financial adviser John Geraghty pointed out that Finance Minister Brian Lenihan signalled in the Budget that he intends to restrict the amount of money people can take out of a pension scheme tax-free.
Mr Geraghty, who runs LABrokers.ie, said those planning to retire should consider doing this before the next Budget as only lump sums up to €200,000 will be tax free from then.
Mr Lenihan told the Dail: "I accept the Commission on Taxation's recommendation that pension lump sums below €200,000 should not be taxed.
"The treatment of sums above this level, and the tax treatment of pensions, including the consolidated 33pc rate of relief will be considered in the Government's National Pensions Framework shortly."
Any move to restrict the tax-free lump sum to €200,000 will only impact "fat cats" as you would need a very large pension pot or to be on a very high salary in a defined benefit scheme, to have a lump sum larger than €200,000 when retiring.
For tax purposes, the maximum someone can have in a pensions pot is €5.4m.
Irish Independent
