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Tax on ARFs

Any amounts drawn down from an Approved Retirement Fund (ARF) are taxed as income and are also subject to the Universal Social Charge.

Where the ARF owner reaches 61 years of age or over during the tax year and where an ARF is set up after 6 April 2000, an imputed distribution is calculated as a percentage (currently 4%) of the market value of assets in the ARF on 31 December each year.

The imputed distribution rises to 5% where the ARF owner reaches 71 years of age. 

The imputed distribution at all ages over 60 is 6% for those with ARF assets and vested PRSAs worth over €2 million.

Income tax, USC and PRSI (if applicable) is levied on this amount as if it had been drawn down.

Actual distributions made during the year normally may be deducted from the ‘imputed distribution’ to arrive at a ‘net’ imputed distribution (if any).