Taxes Consolidation Act 1997 section 784A

Approved retirement fund

Section 784A sets out the tax treatment of approved retirement funds (ARFs), including the exemption of income and gains while retained in the fund, the taxation of distributions, deemed distributions arising from prohibited uses of ARF assets, the rules on distributions following the death of the ARF holder, and the compliance obligations of qualifying fund managers.

• Income and gains arising on assets held in an ARF are exempt from income tax and capital gains tax while retained in the fund; distributions from the fund are taxable as Schedule E emoluments under the PAYE system, with tax deducted at the higher rate where no revenue payroll notification has been received.
• Certain uses of ARF assets — such as loans to the holder or connected persons, acquisitions of holiday or residential property, purchases of shares in close companies, and acquisitions of tangible moveable property — are deemed to be distributions equal to the market value of the assets used, and those assets cease to be treated as ARF assets.
• On the death of an ARF holder, the value of the fund is treated as the deceased's income for the year of death; however, transfers to the spouse's or civil partner's ARF, or to children under 21, are exempt, while distributions to children aged 21 or over are subject to a final income tax charge at 30% under Case IV of Schedule D.
• A qualifying fund manager (QFM) is responsible for deducting and remitting tax on all distributions, must notify Revenue within one month of commencing to act, and must provide information on ARF holders and distributions when requested by Revenue.