The current Standard Fund Threshold (SFT) of €2 million can significantly impact those with pension assets above this limit or those whose funds are projected to exceed it – funds above €2million being liable to an effective tax of c.70%. There are a number of strategies to manage pension assets effectively in light of this restriction.
These include:
- Ceasing Contributions: Stop additional contributions to prevent tax penalties.
- Tax Credit Utilization: Where available, apply lump sum tax credits to offset excess taxes.
- Investment Strategy Review: Adjust investments to lower-risk/return options.
- Early Benefit Access: Withdraw benefits early to reduce taxable growth.
- Phased Access via PRSAs: Utilize phased withdrawals to manage tax exposure.
Contact us and we can review your specific circumstances and recommend suitable solutions