If you have a Pension in the UK with a previous employer but are now resident in Ireland, is it possible to transfer your pension from The UK to Ireland?
There has been a marked increase of late in queries from clients looking to find out what options are available to them, if any, regarding the transfer of pension benefits from the UK to Ireland.
The wisdom of BREXIT will no doubt be debated for decades to come. It is probably true to say that nobody knows what BREXIT will actually look like when it does happen, and it will take at least a decade to see what the long-term consequences are for the UK and the rest of Europe. However, some Irish residents with pension funds in the UK are worried about leaving their pension funds there and are exploring the options relating to transfering their pension from the UK to Ireland.
In principle, there are approved mechanisms to allow the transfer of Pension Benefits from the UK to an Irish Pension Fund. HMRC in the UK allows an overseas pension transfer provided the receiving pension scheme / provider has been approved under the QROPS. This stands for Qualifying Recognised Overseas Pension Scheme, and there are numerous QROPS approved pension providers in Ireland.
There are further conditions as provided for under the QROPS mechanism primarily related to residency and the length of time since the individual left the UK.
Also a new 25% tax charge on pension transfers to QROPS was introduced in April 2017. However this charge will not apply if you satisfy one of the following conditions:
- The individual’s and the scheme’s country of residence are the same
- Individual’s and the scheme’s country of residence, even if they are different, are both within the European Economic Area
- The receiving QROPS is an occupational pension scheme provided by their employer in respect of their current employment
- The receiving QROPS is set-up by an international organisation, or is an overseas public service pension scheme
In effect this 25% charge will only apply where you transfer your pension benefits outside the European Economic Area. Hence if transfering your pension from the UK to Ireland you will not be affected by this charge.
In summary, it is possible to transfer your pension from the UK to Ireland provided certain residency criteria are fulfilled. As stated, the receiving pension scheme / provider is operating under the QROPS system.
If you have pension transfer related questions, please feel free to contact me, Michael Coburn, using the contact details listed below.
Dublin 01 5267770
Wexford 053 9110380