Pension for Non resident

Hi,

I am currently working in the Middle East and have been for over 5 years, so therefore I am considered non-resident in Ireland.

I have 2 private pensions (1 around 100 p.m. & 1 around 400 p.m.), both of which were started while I was resident in Ireland. (1993 & 2000).

I cotinue to pay the contributions each month as the plan is to one day return home to Ireland.

My question is, are my pesnions still valid and am I allowed to continue to pay into my pension as a non-resident?

Thanks

Kev.

While you are entitled to continue paying into these pensions, I would question the wisdom of doing so. If you are not paying tax in Ireland then you are not receiving any tax relief on the contributions. But the proceeds of these policies when you retire may well be taxable. (Assuming they are Personal Pensions, a.k.a. RACs at retirement you can take a quarter of the fund tax-free and the rest will be taxable, unless you are tax exempt at that time.)

I would suggest that a simple savings account might be a better way to save towards your retirement at the moment - you still won't get any tax relief on your savings but there won't be any tax on the proceeds either, except for DIRT tax on the interest and you may be exempt from that as a non-resident.

Alternatively, if you know you're definitely going to be back in the Irish tax system in a few years' time, you could make contributions to a Personal Retirement Savings Account (PRSA). You still won't get tax relief now on the contributions, but you can "save up" the tax relief until you return and use it then.

Liam D. Ferguson

Im in a similar boat, whereby Ive been in Canada for over 3 years and was contributiong to a pension back home for awhile after I moved over. I've since put the pension on hold as I set up one here.

I'd appreciate some advise on what to do with the pension back home. Should I transfer it over to Canada or leave it as it is? Its looking like I'll not move home.

No black and white answer to this one Istabraq.

You can maintain your Irish fund in Ireland (without contributions) - it will continue to be invested and you can draw it as part of your pension when you retire. But it will be paid in Euro and if you're still living in Canada then you'll be subject to ongoing currency fluctuations in retirement. Check to see what charges are continuing on your Irish fund and compare them to the Canadian alternative.

It is possible to transfer most types of fund into a policy in Canada. Your fund would be converted to Canadian $ now and that would end any currency risk for the future. Check with your provider that there are no penalties for transferring now and what their requirements are to transfer.