Do you have a pension in Ireland?

Irish pension expat

Do you have a pension in Ireland?

  • Are you aware that it is subject to up to 4.75% in annual charges and government levies?
  • Do you know that Irish expats have the option to transfer your Irish pension abroad?
  • Are you aware that you will avoid the charges and levies, as well as Irish income tax and death tax by transferring your Irish pension abroad?

That’s right. As an Irish expat, or even as a foreigner who worked in Ireland for more than 10 years, you have the option to transfer your Irish pension to a qualifying overseas pension scheme that meets Irish pension custodians’ standards – similar to the QROPS system for transferring a UK pension abroad. 

Moving your Irish pension offshore has several benefits, including avoidance of the pension provider management charge (1-2% of total fund), the investment management fee (1-2% of total fund) and the government pension levy (0.75% of total fund). You will also avoid paying Irish income tax on your pension income, and Irish death taxes as it will no longer be a part of your Irish estate. You may also be able to cash out a lump sum of up to 30% of the fund value immediately. Finally, transferring your Irish pension internationally allows you to put your pension into a scheme you have more control over.

Irish expats can transfer their pensions to Malta, Australia, New Zealand, the Isle of Man or Gibraltar. You will no longer be subject to Irish taxes, instead you will be subject to the taxes of these countries, or the drawing country if you live in a 3rd country which has a Double Taxation Agreement (DTA) with one of these 5 countries.

A quick example for an Irish expat living in Spain, transferring his Irish pension to Malta:

Irish taxes & levies : nil

Maltese taxes & levies : nil, because Spain has a DTA with Malta.

Therefore the Irish expat would only pay Spanish income tax on his pension income.

The best fit would depend on the Double Taxation Agreements between the country that the Irish expatriate lives in and the receiving pension jurisdiction, as well as any rules surrounding their current pension scheme(s).

Taxation agreements can also change over time and it is best to contact a pension transfer specialist to find the optimal solution.

Contact us here to arrange a consultation.

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Andrew Hipshon

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