A pension fund of €2,000,000 would provide the following benefits at retirement.
Tax free lump sum €200,000
Balance of €300,000 @ 20% tax is €240,000
Total lump sum €440,000
Balance of €1,500,000 is invested into an Approved Retirement Fund [ARF] and a min income of 4% or €60,000 per annum can be drawdown.
- No inheritance tax on pension benefits.
- Pension benefits in an ARF are not subject to inheritance tax for children over 21.
- Full value of Pension benefits in ARF are passed from deceased spouse to the surviving spouse on death.