How is an ARF taxed on Death?

If an ARF-holder is survived by a spouse, then there are no tax implications on the passing of the ARF to the surviving spouse.

In the event that the ARF is passed to children above the age of 21, then a flat 30% tax is chargeable. This is a special rate of Income Tax. Importantly, this 30% tax is not deemed a ‘Capital Tax’, and therefore this 30% tax is not counted towards the Group Thresholds.

ARFs paid to a child under age 21 is subject to the usual Capital Acquisition Tax (CAT) rates.

An ARF paid to anybody else (other than a Surviving Spouse or Children) then Income Tax at source and CAT apply

Note: Compass Private Wealth does not provide tax advice. The above is for guidance only