UK private pension lumpsum

J

Juddy

Registered User
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I have a UK private pension from my days working there. Not too far away from the 55 mark and will be able to take out 25% of the pension value as a lumpsum. Will I have to pay Irish tax on this?
 
I am in a similar position and asked the question of the Revenue Commissioners. Q&A posted below, and I was careful to specify exactly the type of pension (DB/final salary). This is now filed away in my ROS inbox awaiting the day I take this pension:

I have a further deferred UK pension that I am now able to take for the first time. I am aware that the new monthly pension payments will be taxable in Ireland. As part of the scheme rules, I can commute an element of the pension (up to 25% of the pension fund value) into a lump sum at commencement. This lump sum would be payable tax - free in the UK. My specific question is if, as an Irish tax resident, I commenced this UK pension in the next couple of years, and elected to take the 25% lump sum, would this lump sum be taxable in Ireland? The pension is a UK occupational scheme, not for UK government employment, and is a final salary/defined benefit scheme. Your reply will determine my actions: if the lump sum is tax -free in Ireland, I will take it. If it is taxable, I will simply take the pension without the lump sum. Thanks in advance Paul XXXXXX



Hi Paul, Please note the lump sum would not be taxable in Ireland. Regards, Kay XXXX Sligo Revenue District

I believe it depends on the nature of the pension in question. If it would be approved (in a Revenue sense) in Ireland, it has the same tax freedoms as an equivalent Irish scheme.

Paul
 
Thanks Paul. To be sure to be sure, I will pose same question to my revenue office. Didn't realise they answer such questions.
 
No, you do not have to pay tax on the UK tax free lump sum. The rest of the UK pension is taxable in Ireland but there is a double taxation agreement with the UK (at present). You will have to pay tax in the UK and submit a return to the Irish revenue and liaise with HMRC also. That may be fine when you are 55. Not so sure about when you are 85...



Steven
www.bluewaterfp.ie
 
SBarrett said:
The rest of the UK pension is taxable in Ireland but there is a double taxation agreement with the UK (at present). You will have to pay tax in the UK and submit a return to the Irish revenue and liaise with HMRC also.
Click to expand...

My understanding is that the UK pension is paid gross and taxed in Ireland because it's a private pension.
 
Thanks to all for responses above. While I have you, have any of you had any dealings with PEPs / ISAs. These are unit funds that you could invest in if living in UK and gains were tax free. Wondering what is the situation if still hold these funds but now back living in Ireland?
 
PEPS and ISAS are fully taxable in Ireland with effect from becoming Irish resident. We frequently consult on cross-border planning issues and this is one of the most common mistakes we see made by people moving to Ireland.
 
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