Employer contributions to PRSA from abroad

Discussion in 'Pensions' started by Ministry Fox, Mar 4, 2017.

  1. Ministry Fox

    Ministry Fox New Member

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    Can my employer (a foreign company) make contributions to my PRSA on foreign income for which I do not pay tax on in Ireland?
     
  2. SBarrett

    SBarrett Frequent Poster

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  3. Ministry Fox

    Ministry Fox New Member

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    I wish I had known that before I set it up! This could cost me 4k in missing contributions, not to mention the 4k that I put into the PRSA in order to be able to claim the matching contributions. Is there no workaround?
     
  4. Joe_90

    Joe_90 Frequent Poster

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    Steven

    Can I not put what ever I like into my PRSA?

    Is it the tax relief that's at issue? So say I'm 40 and have no pension can I put €50k into my PRSA?
     
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  5. Merowig

    Merowig Frequent Poster

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    If you are not paying taxes I assume you are not a resident for tax purposes?
    Did you check out what private pension scheme is available for you in the country you are a tax resident?



    Joe can you put what you want in your PRSA though on what you get tax reliefe depends on your age and income.
     
  6. SBarrett

    SBarrett Frequent Poster

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    Hi Joe

    Yes, you can make a pension contribution and not claim tax relief on it. You are still subject to all the pension rules though, 25% tax free lump sum, the remainder subject to tax under PAYE. AMRF requirements too. You can get your 25% tax free, tax free growth and you can draw out the rest at the lower rate. It's the full amount that is subject to tax though as opposed to 41% on profit for investment funds. Restrictions on when you can access it too and if you are subject to the AMRF, you can only take 4% of that amount each year. Never had anyone invest in a pension and not claim the tax relief.


    Steven
    www.bluewaterfp.ie
     
  7. JoeRoberts

    JoeRoberts Frequent Poster

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    I thought the tax relief could be carried forward until he has relevant taxable earnings.
     
  8. Ministry Fox

    Ministry Fox New Member

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    Hello Steve and Merowig
    I'm not tax resident in Ireland. I thought I would become so when I opened the PRSA, but I ended up moving abroad again shortly afterwards. I move countries and change tax residency quite often, so I really wanted a pension in Ireland, as that's where I own property and plan to retire.
    If I may rephrase my original question, is a British company simply prohibited from paying into my PRSA for some kind of legal reason? Or is it more a question of not being to claim tax relief?
    Thanks again for your replies. I'm trying to get my own PRSA broker to answer these questions but I'm not really getting anywhere with them...
     
  9. Merowig

    Merowig Frequent Poster

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    Last edited: Mar 8, 2017
    If you are a foreigner in Ireland and you had a pension scheme in an other EU country before you moved to Ireland you can continue paying into that foreign fund and claim tax relief in Ireland (doubtful an Irish company will contribute to it though).
    http://www.revenue.ie/en/practitioner/tax-briefing/archive/62/tb02.htm. The UK might have something similiar.

    As you don't pay Irish taxes you won't be able to claim tax refund in Ireland. Only in Britain and I don't know if Britain has a similiar legislation to above.

    Honestly I would open a British Pension fund or joining a UK based occupational scheme if offered - you have most likely a wider choice of funds in the UK and they are also often cheaper than in Ireland which will over time amount to a significant difference in fund value. It will be perhaps a bit of hassle in keeping track but it should be worth to go via this route.

    Post Scriptum: I don't believe that an UK employer has to contribute to a pension scheme outside of the UK. Employer contributions also are tax beneficial in the UK for the employer. I doubt it a lot that pension schemes outside of the UK would be acceptable.

    So you will have most likely to enroll in a UK scheme if you want your employer contributions and also want to get tax benefits from your contributions.
     
    Last edited: Mar 8, 2017