UK Pension Transfer to Ireland

W

Wiresandmore

Registered User
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Hi,

(First time posting here!)

I have circa £250K in a UK pension from working there for many years.

I am late forties, not planning to retire for another 15 years or so. I also have circa €300K in Ireland which I am continuing to pay into.

Are there good reasons either to move the UK pension here or to keep it there? I plan to live in Ireland long-term (certainly to be here in retirement).

Any advice appreciated!
 
With the new pension freedom rules in the UK, it might be a good idea to leave it there.

If you transferred it to Ireland, you get about €325k for your £250k (the exchange rate would be a reason to transfer), giving you €625k plus whatever contributions and growth over the next 15 years.

If your total Irish funds go over €800,000 you have to pay 20% tax on any lump sum over €200k.

Funds outside of Ireland are excluded from this €800,000 amount, so it may be more efficient in the future to leave it where it is.

Of course, there is also the issue of charges. How much are you paying on your money in the UK and how much here?


Steven
www.bluewaterfp.ie
 
My firm specialises in providing cross-border planning for Irish residents with UK assets.

The question you are asking relates to Qualifying Overseas Pension Schemes (QROPS)

Last year, HM Revenue and Customs launched a crackdown on overseas schemes where people wanted to move their pension abroad.

The Republic of Ireland saw the number of schemes available reduce from 797 to just 56. Switzerland and Australia have both reduced to just one scheme being permitted. Spain has reduced from 16 to two schemes, and South Africa has dropped from 29 schemes to seven.

If you transfer your pension to a non-qualifying scheme you will face a 55% tax charge.

The change is as a direct result of “pensions freedom” in the UK. Under the new rules, which allow pension investors to take their whole pension pot as cash, pension schemes must prohibit members from accessing their savings before the age of 55, unless the member is retiring early due to ill health.

Many overseas schemes allow under-55s to take some of their funds early in some circumstances. They are unlikely to change their rules to accommodate the UK requirements because this would disadvantage their local members and therefore many schemes which previously allowed transfers in are now restricted.

You also need to consider if your current pensions are defined benefit (also known as final salary) or defined contribution.

Are you a UK National or Irish?
If you are an UK National would you ever plan to return to the UK? This has tax implications in Ireland and also should inform your retirement planning decisions.
 
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