Reach out today
Contact us today and book your consultation https://www.quigley.ie/book-consultation and see how Quigley Financial Brokers can help you choose the best
options available or contact richard@quigley.ie for further information.
In September, the then Minister for Finance, Jack Chambers, published the report of
the independent examination of the Standard Fund Threshold. The targeted review
of the SFT regime was led by an independent expert, Dr. Donal de Buitléir.
The Standard Fund Threshold is a limit on the amount of pension benefits an
individual can accrue from Irish pension arrangements. The current limit is set at €2
million and has remained static since 2014 and anything over this amount will be liable to chargeable excess tax at 40%.
The Government implemented some aspects of the report in this year’s Finance Bill
which included;
Changes to the Standard Fund Threshold
The Finance Bill confirms future increases in the SFT of €200,000 per year
beginning in 2026 until 2029.
Year SFT
2024 €2,000,000
2025 €2,000,000
2026 €2,200,000
2027 €2,400,000
2028 €2,600,000
2029 €2,800,000
In addition to those increases, the Finance Bill confirms that from 2030 onwards the
SFT will be index linked to increases in average earnings as per Central Statistics
Office (CSO) data.
It is also important to note that for Defined Contribution clients the ability to fund for
an extra €150,000 above SFT remain possible as tax paid on pension lump sums up
to €500,000 can still be offset against Chargeable Excess Tax bills. See the
enhanced effective rates of the SFT for these future years below.
Year SFT SFT (effective)
2024 €2,000,000 €2,150,000
2025 €2,000,000 €2,150,000
2026 €2,200,000 €2,350,000
2027 €2,400,000 €2,550,000
2028 €2,600,000 €2,750,000
2029 €2,800,000 €2,950,000
The ringfencing of pension lump sum limits
There will be no changes to the taxation of pension lump sums. The lifetime limit for
tax free lump sums will remain at €200,000 with the next €300,000 of any pension
lump sum taxable at 20%. The threshold for the higher rate of taxation to apply to a
pension lump sum will be limited to €500,000 rather than a proportion of the SFT.
The above changes will require careful retirement planning, at Quigley Financial
Brokers we can provide a range of solutions for employers and their employees.
Comentários