Taxable Cash

Our aim is to save you money but to also give you the best possible service without compromising the quality of our product offering. Depending on your circumstances, you may decide to take a large chuck of your savings by way of taxable cash. If you need more information in this regard, please call us on 01-4546730 or e-mail the office on info@paulryan.ie

We have outlined below a number of key questions that you may have on Taxable Cash below

What is Taxable Cash?

Taxable cash applies to the choice of taking your entire pension pot in one. It is sometimes considered to be an "extreme" ARF. I.E: An ARF that can be drawn down on "day 1". As the name suggests "Taxable Cash" is seen as income in the eyes of the Revenue. This option is often not recommended as many individuals can be in receipt of income in the year that the "Taxable Cash" is drawn down and hence could find themselves liable to income tax on the entire sum of currently 42% (Top Rate).

What is the difference between Taxable Cash and an ARF?

The main factor which makes an ARF different to the option of taking taxable cash is that your withdrawals are spread over a number of years and therefore it is possible to achieve a lower take rate on the sum. As independent financial advisors we can help guide and advise you on the prudent use of annual tax credits, reliefs such as medical expense relief and standard rate bands along with income tax exemption limits

What are the benefits of an individual taking the "Taxable Cash" option?

There a 3 main circumstances which would encourage you as an individual to take out taxable cash.

1. If you have available offsetting credits and reliefs (Standard Tax Deductible Medical Expension), unused standard rate bands or income exemption limits in the same tax year. This could potentially lead to a very low or no tax liability on the taxable lump sum payment.

2. Where the lump sum available is very small and not really worth investing in the ARF

3. Where an individual requires capital as a matter or urgency to clear a mortgage or loan or some other specific purpose 

Paul Ryan Independent Pensions & Financial Consultants Ltd is regulated by the Central Bank of Ireland.

© 2017 Paul Ryan IPFC

  • 19 Greenmount House,, Greenmount Office Park Harolds Cross Road, Dublin 6w Ireland
  • Phone: +353 1 4546730
  • Fax: +353 1 4163130
  • Email: info@paulryan.ie
Image