TAX RULE CHANGE WILL EXTEND ARFs TO 25 YEARS - The Finance Bill has changed the tax rules in relation to Approved Retirement Funds (ARFs), the structures into which many people move their defined contribution pensions on retirement. In 2011, the Government increased the "imputed or notional distribution of assets" - the amount Revenue assumes a person will draw down from their ARF each year - to 5%. Revenue then taxes this amount of the fund at a person's marginal rate, regardless of whether they actually take it from the fund. At 5%, the fund would be fully used in 20 years. With many people living into their 80s and enjoying 25 years or more of retirement, it was argued the 5% figure would lead to people living their final years in penury, writes the Irish Times. Revenue has clearly acknowledged the argument, and the Finance Bill lowers the imputed drawdown rate to 4%, meaning an ARF will now last 25 years after retirement. "The purpose of the change is to reduce the risk that the owners of ARFs in these circumstances will outlive their retirement funds," the Department of Finance states. Imputed drawdown was introduced to stop people using ARFs as a tax-avoidance measure.
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KENNEDY WILSON EUROPE'S FOCUS REMAINS ON IRELAND AND THE UK - Real estate investment firm Kennedy Wilson Europe's focus remains on the UK and Ireland, managing director Peter Collins said, in contrast to previous suggestions that its focus had switched to the continent. Mr Collins said the firm is "actively looking to add more stock to our existing portfolio here in Ireland at the moment." "We're people who want to own and manage buildings over the long term," he told the Irish Independent. In June, Kennedy Wilson's Fiona D'Silva told a conference that the firm was "looking more at opportunities outside Ireland and the UK to Italy and Spain". "We think it has been great in Ireland and see things still coming off banks' [balance sheets] but pricing is moving ahead of itself a little bit so we are a little bit more cautious," she said. Mr Collins said that in total, Kennedy Wilson hopes to have 350 or 360 new rental residential units under construction here next year. "They will probably hit the market or deliver into the market towards the end of the following year," he told delegates at the Society of Chartered Surveyors Ireland (SCSI) annual conference.
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FORMER QUINN GROUP SEES PROFITS DECLINE BY 57% - Operating profits at the former Quinn manufacturing group last year declined by 57% to €18.6m. The group, now known as the Aventas Manufacturing Group Holdco Ltd, is made up of four core businesses -container glass, construction industry supplies, plastics & packaging and radiators, writes the Irish Examiner. Aventas is 75% owned by its former creditors, mainly banks and hedge funds, with the remainder held by its principal former lender, the Irish Bank Resolution Corporation in liquidation. Last week Aventas confirmed the sale of its radiator business for €25m. New accounts just filed by Aventas Manufacturing Group Holdco Ltd show that the group sustained the drop in operating profits after revenues decreased by 2% from €679.88m to €666.75m in the 12 months to the end of December last. It recorded a pre-tax loss of €12.2m after interest payments of €37.9m and a profit of €8m on an asset disposal are taken into account. Operating profits declined from €43.48m to €18.6m and a foreign exchange loss of €9m last year compared to a foreign exchange gain of €13.7m in 2012 was a major factor in the profit decline.
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EU TELLS BRITAIN TO PAY EXTRA €2.1 BILLION - Britain has been told to pay an extra €2.1 billion to the EU budget within weeks on account of its relative prosperity, a hefty surcharge that will further add to David Cameron's domestic woes over Europe. To compensate for its economy performing better than other EU countries since 1995, the UK will have to make a top-up payment on December 1 representing almost a fifth of the country's net contribution last year. France, meanwhile, will receive a €1 billion rebate, according to Brussels calculations seen by the Financial Times. The one-off bill will infuriate eurosceptic MPs at an awkward moment for the prime minister, who is wrestling with strong anti-EU currents in British politics that are buffeting his party and prompting a rethink of the UK's place in Europe. Mr Cameron is determined to challenge the additional fee and last night met with Mark Rutte, the Netherlands premier, to discuss the issue. His country is also being required to make a top-up payment, though it is smaller than the UK's. A Downing Street source said: "It's not acceptable to just change the fees for previous years and demand them back at a moment's notice." The source added: "The European Commission was not expecting this money and does not need this money and we will work with other countries similarly affected to do all we can to challenge this."
