There have been changes to the HMRC rules involving transferring pensions from the UK to Ireland. You can find out more about these changes here
A lot of people who left Ireland to work in the UK are now returning home. As much as we give out about Ireland, we always come back. This is where are friends and family are and Tayto crisps are plentiful! A lot of pension benefits have been accumulated too in the UK. People don’t want the hassle of administering their pension in another country and would prefer to have it in Ireland with them. So we will look at how you go about transferring pensions from the UK to Ireland.
The pension plan that you transfer to in Ireland must be approved by HM Revenue and Customs. Pension providers in Ireland can get their pension products approved as a Qualifying Recognised Overseas Pension Scheme (QROPS) .
There are quite a few QROPS approved products available, giving you a wide choice to choose from. The recent introduction of the Pension Freedom Rules in the UK changed the earliest age that you can access your pension benefits to age 55. This rule has to apply to the Irish pension that you move to.
If it is not approved by HMRC, the pension scheme may refuse to make the transfer or you’ll have to pay at least 40% tax on the transfer. There is no reason why you should put yourself in a situation where you pay 40% tax on the transfer. Ensure you use a QROPS approved pension.
This is the most important rule and something that you would not know about. You must have left the UK for at least 10 years before you can access your benefits, otherwise you will incur a tax liability on the transfer.
The earliest age that you can draw down your pension is age 55. If you are over age 55 and non UK resident for over 10 years when you make the transfer, you can mature the benefits immediately once they have been received in Ireland.
Update: The Finance Act 2017 changed the rules on transferring out of the UK and introduced a 25% tax. You need to be aware of these changes and if they apply to you. You can read about them here
Once you have satisfied the 5 year rule and picked your pension provider, it’s down to form filling and there’s a lot of it.
The process of transferring the benefits can be a bit of a pain but that is mainly down to the amount of paperwork and having to deal with multiple providers. If you follow the procedures followed above, you will be fine.
If you have any questions, you can contact me directly at email@example.com