ARF and deciding to live abroad

J

jasdpace@gmail.

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Just wondering what happens if someone has an ARF and decides to go to live in, say, France or Spain.

Can QFMs cope with the requirements to split income between capital, interest, dividends, etc. as required by the Revenue?

How does this work out in practice?
 
You can’t get a PAYE exclusion order.

You are stuck paying Irish income tax for life even if you move to Monte Carlo.

You need to transfer your Irish pensions overseas before retirement
 
You can also implement an investment solution that will give you the desired tax outcome depending on your country of residence.

Overseas pensions aren’t for everyone. A lot of people like to leave them in a country they are familiar.
 
1. Yes they should
2. Yes, but ultimately it’s the situate of the asset will decide whether you can get a refund.
3. Big difference. Generally Annuities will only be taxed in the country you are living in as per the dta. ARFs are taxed in Ireland and could also be taxed again in local country. Maybe able to reclaim the Irish tax. It really impacts people who are living in a lower tax country.

Google pwc arf non resident. Very good article on it.
 
jasdpace@gmail. said:
Hi Marc,

With respect, my questions were very specific and not really answered in your response?
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Any investment management firm like Davy etc can do this. You get the same granular detail as someone with a personal account In respect of dividends, gains, etc.
 
Oisin19 said:
1. Yes they should
2. Yes, but ultimately it’s the situate of the asset will decide whether you can get a refund.
3. Big difference. Generally Annuities will only be taxed in the country you are living in as per the dta. ARFs are taxed in Ireland and could also be taxed again in local country. Maybe able to reclaim the Irish tax. It really impacts people who are living in a lower tax country.

Google pwc arf non resident. Very good article on it.
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To expand on this, AFAIK only a handful of DTAs have an ARF clause in them. The vast majority do not. I am lucky I guess in that the Irish/German DTA does have the ARF clause, and hands sole taxation rights to Ireland, so I wouldn't be taxed again on this in Germany, should I be able to establish an ARF in the first place.
 
However, most people don’t want the arf clause as Ireland has a higher income tax rate than most countries. The goal is transfer the taxing rights to the lower tax country
 
Oisin19 said:
You can also implement an investment solution that will give you the desired tax outcome depending on your country of residence.

Overseas pensions aren’t for everyone. A lot of people like to leave them in a country they are familiar.
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Yes, you can and this is what we do for example for US citizens giving them an ARF with US ETFs so that on a look through basis the IRS doesn’t see a bunch of PFICs.

BUT you are moving abroad. By definition you are going to be making changes. Being “familiar” with something has no place in planning a move and as I noted the best approach here is to plan to offshore Irish pensions. That’s just a fact rather than find out after the fact, as I noted, it’s too late to get an Irish PAYE exclusion order.

Or do we propose continuing to drive on the left in France perhaps?
 
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Marc, You know as well as I do that the vast majority of overseas transfers end up with the person in one country and the pension in a different country, and that second country most people can’t even point to on a map.

The scenario you outline is completely different than the reality of the situation.

and to use your analogy plenty of people continue to drive on the left as only 40-50 overseas transfers happen each year.

Tax isn’t the be all and end all of everything for the majority of people and this backed up by the data.
 
Marc said:
BUT you are moving abroad. By definition you are going to be making changes. Being “familiar” with something has no place in planning a move and as I noted the best approach here is to plan to offshore Irish pensions. That’s just a fact rather than find out after the fact, as I noted, it’s too late to get an Irish PAYE exclusion order.
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Giving definitive advice in the form of grandstanding statements like this - without having a clue of the context - is really not impressive and genuinely very irritating. Your response yesterday morning was not at all helpful and here we go again.

In my case, I have a substantial deferred DB pension with DC funds from the same employer in addition. This DC fund will be used, in part, for the TFLS and it's the balance I'm wondering about. This balance is small relative to the overall value. It is the tail. It would be really silly to let this tail wag the hugely more significant DB portion. It doesn't make sense for me to do anything other than draw my DB pension when it becomes payable. Legally, my DC assets must be actioned at the same time. Accordingly, your "fact" is complete and utter nonsense. I know from form that you will not acknowledge this.
 
jasdpace@gmail. said:
Giving definitive advice in the form of grandstanding statements like this - without having a clue of the context - is really not impressive and genuinely very irritating. Your response yesterday morning was not at all helpful and here we go again.

In my case, I have a substantial deferred DB pension with DC funds from the same employer in addition. This DC fund will be used, in part, for the TFLS and it's the balance I'm wondering about. This balance is small relative to the overall value. It is the tail. It would be really silly to let this tail wag the hugely more significant DB portion. It doesn't make sense for me to do anything other than draw my DB pension when it becomes payable. Legally, my DC assets must be actioned at the same time. Accordingly, your "fact" is complete and utter nonsense. I know from form that you will not acknowledge this.
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I haven’t given any definitive advice to anyone. This forum is not the place for specific advice as it is not regulated or covered by professional indemnity insurance.

Therefore I generally restrict my comments to observations which apply in aggregate rather than a specific question of fact which most often should be dealt with when, as you correctly note, one is in possession of all the facts. Which were not disclosed yesterday.

Your question posed that you “were wondering” and I replied you can’t get a PAYE exclusion order. There is nothing factually incorrect about that statement and for many people contemplating emigration it’s actually potentially very helpful. Especially as we are currently representing a client bringing a case of negligence against another adviser who moved their pensions to an ARF knowing that they were moving to Portugal.

My comment that those considering emigration should offshore their pensions was restated in the context of a comment that people might prefer to remain with something “familiar” that is not remotely related to having a DB pension.

I also highlighted that we specifically use US ETFs in ARFs for US Citizens who have emigrated to expressly address the PFIC issue. I wonder how many brokers in Ireland even understand this.

You had a very specific situation you did not disclose and therefore you got annoyed with my generic reply. I apologise if that upset you but please remember that most of my posts are attacked by hostile posters intent on causing trouble. If you had to put up with half the crap I do you’d understand why I just ignore many posts. On that subject, having defamatory statements deleted by moderators won't help you in court as I have screenshots.

Coincidentally, we recently consulted on a DB/DC hybrid situation and in that matter, it was perfectly sensible to take the transfer value from the DB scheme.

These things are often not cut and dried.

Thread 'Should you always take a defined benefit pension'
https://www.askaboutmoney.com/threads/should-you-always-take-a-defined-benefit-pension.232629/
 
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Marc,

So the "fact" that the best approach is to move the ARF pre retirement is no longer a "fact", is it? I was also right that you wouldn't acknowledge this.
 
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