In the past the ARF was seen as the capital preservation product and it still is when compared to annuities.
However revenue rules have now made ARF withdrawals a requirement. From 2010 the revenue will assume a drawdown of 5% of the asset value of the ARF, even if the withdrawal has not been made. Your tax liability will be based on this assumed drawdown. The national income drawdown has been increased from Budget 2011 to 5% of the asset value as of the valuation date Dec 31st.
It is therefore advisable to make a withdrawal of income to at least the assumed revenue percentage.
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