Income tax on ARF for deceased

I have just completed a pay and file 2014 for my mother who passed away in March 2014.
My question is regarding her ARF fund. Before the funds were passed over to her estate, tax at 40% and USC were deducted.

I would like to know whether the beneficiaries of the estate, there are 3, have to pay further income tax on the remainder of the value of the ARF?

Thanks for any advice.

What's the relationship between your mother and the beneficiaries and how old are the beneficiaries?

The beneficiaries are all children of the deceased - adults.

Was the ARF intact when she died?

If so, income tax at 30% should be deducted when it's paid out to you guys.

Nothing more than that.

Did she have a will and did it refer to the ARF?

Thanks for your response.

The ARF was intact when she died. She did not refer specifically to it in her estate, just to say that all her monies should be divided equally between her 3 children.

The executor of the estate informed them of her death and once they received the grant of probate they paid out the value of the ARF less tax deducted at 40% and USC.

So effectively it seems that her ARF is subject to a double taxation, if the beneficiaries also have to pay a further tax of 30%.
Seems a little strange. Can you shed any further light on this?

Thanks very much for your help!

ARF's paid to adult children (over 21) are not within the CGT thresholds, to avoid double taxation.

Who deducted tax at 40% plus USC? The life company or the solicitor? It should be a flat 30%.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Thanks.

The life company deducted the tax at 40% and the USC.

What they've done doesn't make sense.

They should have deducted income tax at 30% with that being the end of it.

I am interested in this question as I have an ARF myself and intend leaving it to an adult child. I have been doing some googling on it.

My reading of the revenue guide is-----

However, a distribution —
(4)(c)
• made to a child aged 21 or over from the ARF of the deceased, or
• made from an ARF in the name of a surviving spouse or surviving civil partner funded by the ARF of the deceased spouse or civil partner (other than such a distribution to a child aged under 21 years of the surviving spouse or surviving civil partner),
is subject to an income tax charge under Case IV of Schedule D at a rate of 30%. The QFM should deduct this tax from the distribution.

Could it be that in this case ( because the ARF going directly to children was not specified in the will) that the distribution is considered to be to the ARF holder, and not to the child.

I am keen to know this, as perhaps specifying in the will that the ARF goes directly to child may avoid the additional tax?

Yes, you are right. I've been on to Revenue and it seems to be because the ARF is treated as the deceased's income and assessed in the year in which they died.