If you’ve worked in the UK at some stage of your career you’ve possibly built up a fund in a UK pension. Now that you’re back living in Ireland you may wish to bring your pension home and have more control over your investment options, both now and when you retire.
• Any UK pension can be transferred to another country once the receiving pension has been approved by HMRC (Her Majesty’s Royal Customs). This is known as a Qualifying Recognised Overseas Pension Scheme (QROPS).
• When your pension is transferred from the UK, we will invest it in a Buy Out Bond.
What are the tax implications when I drawdown my benefits from the Buy Out Bond?
Once you have not been resident in the UK for more than five years when the payment is made, then there is no immediate tax liability. However, QROPS must report payments within ten years of the original transfer date to HMRC regardless of the member’s residency status.
I’ve been a tax resident in the UK in the last six UK tax years
If you’ve been a resident in the UK in the tax year when the payment is made or in any of the five preceding years, then any benefit arising from the buy out bond, will be reported to HMRC and you could be subject to UK unauthorised payment charges to HMRC.
I haven’t been a tax resident in the UK in the last six UK tax years
If you haven’t been a tax resident in the UK in the last six tax years then there are no UK tax implications of transferring or withdrawing benefits from the buy out bond. Please take note that your UK tax residency needs to be considered each time you take or move benefits from a QROPS.
What are the reporting obligations to HMRC?
HMRC introduced new QROPS reporting requirements in April 2012. Now we must report all payments made within ten years of the inception of the Buy Out Bond contract. This will not have any taxation implications for you once you satisfy the non‑residency requirement.
For example, if you have been living in Ireland for ten years but only transfer your UK fund home now, you can draw benefits without any UK tax implications but we would still have to advise HMRC of the payment.
I want to transfer my UK pension to Ireland.
What are my retirement options once I’ve transferred my UK pension to Ireland?
On retirement, you can take a 25% cash lump sum and with the balance, subject to Revenue rules, you can
• buy a guaranteed pension income for life (an annuity) or
• invest in an Approved (Minimum) Retirement Fund or
• draw down the entire fund as taxable cash or
• choose a combination of these options
Contact us and we will do all the work for you. Take control of your pension. After all it’s what will provide for you in the future.
We are specialists in this area and have experience doing these transfers.