QROPS Ireland. Pension Transfers Offshore for Irish expats and British expats
British expats living in Ireland or who want to retire in Ireland as well as Irish residents can now engage in a QROPS Ireland pension transfer to maximize reduce taxation in their home countries.
British expats living in Ireland can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like Gibraltar or Malta and will no longer have to pay UK taxes on their pension if they stay offshore.
Irish citizens can move their pension offshore to avoid the new levy on Irish pensions which was announced in May 2011. The new levy will start at 0.6% p.a. The new pension levy will amount to an average of 7.5% on their pension pot. The contribution will be made up of 3% on the first €15,000 of pay, 6% on the next €5,000 and a 10% levy on the remainder of earnings. Irish citizens and residents can now avoid this tax by a transfer to a QROPS.
Over 300,000 Brits live in Ireland. They can avoid UK taxes by transferring their pension offshore to a secure jurisdiction such as Gibraltar or Malta. Similarly, Irish citizens and residents can move their pensions offshore to avoid the new taxes on Irish pensions. A QROPS Ireland pension transfer may be advantageous for both British expats and Irish residents who have pension pots around the 100,000 EUR or 50,000 GBP mark.
The Benefits of a QROPS Ireland Pension Transfer
QROPS Ireland pension transfer for British expats who live or want to retire in Ireland:
• Avoids UK income tax
• Avoids UK dividends tax
• Avoids UK capital gains tax
• Avoids UK inheritance tax
• Has the ability to make higher returns with freedom of investment
• Family Protection: Upon death, the entire pension pot gets passed on to your nearest and dearest
• Security: the pension is held in a secure jurisdiction as Gibraltar or Malta who both still have strong links to the UK, but operate with their own tax structure and have strong financial regulatory bodies.
A QROPS Ireland pension transfer for Irish residents:
• Avoids Irish pensions levy. The average tax being 7.5%
• Avoids Irish CGT and IHT
• Have the ability to make higher returns with freedom of investment. The rate of return on pensions has averaged only 1.7% p.a. over the past 10 years, according to a recent report of public pension funds. A QROPS Ireland aims to make at least 6% p.a. after all charges are taken into consideration.
What is a QROPS Ireland?
A Qualifying Recognized Overseas Pension Scheme (QROPS Ireland) allows your UK pension to be transferred offshore to reduce your tax burden. Effectively, you will no longer pay UK tax on your pension whilst you are offshore. The QROPS would need to report to HMRC every 5 years to make sure the QROPS is still satisfying conditions laid down by HMRC.
What is the economy of Ireland like?
The economy of Ireland has transformed in recent years from an agricultural focus to a modern knowledge economy, focusing on services and high-tech industries and dependent on trade, industry and investment. In terms of GDP per capita, Ireland is ranked as one of the wealthiest countries in the OECD and the EU-27 at 5th in the OECD-28 rankings as of 2008. In terms of GNP per capita, a better measure of national income, Ireland ranks below the OECD average, despite significant growth in recent years.
A study by The Economist found Ireland to have the best quality of life in the world. The 1995 to 2000 period of high economic growth led many to call the country the Celtic Tiger. One of the keys to this economic growth was a low corporation tax, currently at 12.5% standard rate.
If you are living in Ireland at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS to avoid further UK taxes down the line. A QROPS is a great option for moving a pension into EUR or as a tax planning tool to shield your family from inheritance tax.
Which Companies Can I Use for a QROPS Ireland Pension Transfer?
Do I need to move my pension to Ireland?
No. Your pension can be transferred to the Gibraltar or Malta where it will be out of the UK tax system. It doesn’t matter where you live as long as it is outside the UK.
Do I need to live and retire in Ireland?
As long as you live outside the UK, either in Ireland or somewhere else overseas outside the UK, you will avoid UK taxation. A pension transfer to Gibraltar or Malta may be more advantageous that a pension transfer to Ireland.
What if I return to the UK?
What happens to a QROPS Ireland if I move back to the UK? If you return to the UK, your pension reverts to normal UK Self Invested Penrsonal Pension (SIPP) rules and you will pay the relevant UK taxes. Otherwise, if you live anywhere else abroad you can avoid UK income tax, dividends tax, capital gains tax and inheritance tax on your pension. Furthermore, your beneficiaries will be protected. Upon death, they will receive the entire pension pot.
QROPS Trustees in Ireland
There are 693 QROPS trustees in Ireland on the QROPS list, that is more than any of the other countries. However, these schemes are really intended only for Irish residents, as the way Ireland taxes the pension income of non-residents is not competitive for non-resident QROPS with such other jurisdictions as Malta and Gibraltar. Even for residents in Ireland, often an offshore jurisdiction can provide a better option. In fact there have been rumblings that the Prudential may hook up with a local Irish QROPS and try to exploit Ireland as a 3rd jurisdiction QROPS destination. Apparently, Prudential International have been in preliminary talks with the Irish tax authorities in the last few weeks. Apparently, Irish Tax & Customs have pondered changinge the way pensions domiciled in Ireland for non-residents are taxed, in a way similar to the way taxes are incurred in Gibraltar and Malta. A decision is expected at the end of the year. For now, Gibraltar
Which QROPS jurisdiction should I transfer my pension to?
You don’t need to transfer your pension to Ireland. Often the best jurisdiction may be the Isle of Man or Guernsey depending on the size of your pension and future plans as far as accessing your pension. You need to contact QROPS Specialists in order to figure out the best location for your pension to maximize tax efficiency whilst minimizing QROPS fees.
Here is a more recent article which gives you more information on a pension transfer to Ireland and discusses the differences between a transfer to Gibraltar, Malta, New Zealand or the Isle of Man.
For enquiries, please send email to firstname.lastname@example.org
Pension tax relief for British expats, QROPS Ireland article written by QROPS Specialists.QROPS Ireland Pension Transfer for British Expats to Avoid Taxes by Richard Malpass