MOJO Finance will transfer your UK pension to Ireland

So many in Ireland have spent a large part of their career working in the UK where opportunities were plentiful for those working in financial services and the legal profession for example. Once it became clear that Charlie Haughey’s vision for the IFSC and for Ireland as a key player in financial services was well on the way to being realised, many returned home leaving valuable old company pensions behind.

MOJO Finance has just completed the transfer of two such pension arrangements from the UK to a tax efficient pension structure in Ireland called a Qualified Recognised Overseas Pension Scheme (QROPS).

A QROPS is a particular kind of pension structure that the UK’s HMRC has approved and that can accept pension transfers from the UK to Ireland without imposing a tax penalty of up to 55%. HMRC is the UK’s tax and revenue authority.

The following are the key advantages of moving UK pensions to an Irish QROPS:

Convenience: Having your pension benefits in one country and denominated in euros makes more sense if you want to retire in Ireland.

Planning your estate: If your beneficiaries reside in Ireland, leaving your pension in the UK could lead to complicated inheritance issues in the future.

Pension pot limits: Pensions transferred to an Irish QROPS do not count toward the €2 million Standard Fund Threshold amount in Ireland, which is the amount you can save for retirement in Ireland before being subject to Chargeable Excess Tax of 40% on amounts exceeding €2 million (or €2.15 million with careful tax planning).

Flexibility in retirement planning: Transferred pension benefits may be accessed beginning at age 55 or earlier if a person becomes unwell.

Things to think about before moving your pension from the UK to Ireland.

Are there taxes associated with the transfer?

First, be sure you move your pension to a plan that has been authorized as a QROPS by HMRC. Otherwise, up to 55% of the transferred sum may be subject to UK tax.

Retirement age

At any age, you are eligible to transfer your pension from the UK to Ireland. However, you must be at least 55 years old to access your benefits from a QROPS. Only on the basis of illness is it permissible to access your benefits prior to age 55.

Residence

You may be subject to UK tax on your QROPS at retirement if you resided in the UK for any period of time over the previous five or, in some cases, the previous ten UK tax years.

Regardless of where you reside, payments from your QROPS made within five years of the transfer will be subject to UK tax laws.

When filing a claim under your policy, you must specify the length of time you have spent outside the UK. Before processing your transfer application, MOJO Finance will let you know if you’re subject to any UK tax charges.

When may you access your pension from a QROPS?

Benefits may be given for transfers made to a QROPS after April 6, 2017, if you meet the following requirements:

You must be 55 years of age or older and You must have lived outside the UK for at least ten UK tax years.

Benefits may be awarded if the transfer was made into a QROPS before April 6, 2017, and you:

You must be 55 years of age or older and Have not resided in the UK for at least five UK tax years.

Overseas transfer charge

On a QROPS transfer, there is a 25% international transfer fee unless the following conditions are met:

The transfer is made to an occupational pension plan of your current employer, or To a pension structure within your country of residence, or To a pension structure within another country that is a member of the European Economic Area (EEA).

Additionally, the 25% overseas transfer charge will apply if your status changes within five years of the transfer.

Therefore, the pension provider in Ireland will remove 25% of your QROPS value and pay it to HMRC if you move outside of the EEA within five years of the transfer and do not transfer your pension to a new provider in your new country of residence.

Pension Limits

In order to avoid paying taxes, you can only contribute a certain amount to a pension in the UK and Ireland. This is referred to as the Lifetime Allowance in the UK.

If your transfer to an Irish pension is greater than the Lifetime Allowance, it will be examined, and you will be required to pay tax. Prior to the move, the tax due would be withdrawn from your UK pension.

Lump sums

Your tax-free lump sum lifetime limit in Ireland of €200k will include the tax-free lump payments you get from your QROPS. Policy advantages within UK pension

You may be foregoing valuable guarantees from your UK pension if you transfer it to Ireland, especially if it is part of a company-defined benefit plan and this should all be assessed by your financial advisor.

Your retirement choices

MOJO Finance will assess your retirement choices should you remain in your UK pension scheme versus your choices should you transfer your UK pension to Ireland.

If you transfer your pension to Ireland, your retirement possibilities may vary, therefore it’s crucial to assess your options alongside MOJO Finance to decide what is best for you.

Reporting to the HMRC

Within 90 days, all QROPS payments made within the past 10 years must be reported to the HMRC. The transaction will be reported on your behalf to the HMRC by your QROPS provider in Ireland.

I would recommend engaging with MOJO Finance to advise on and execute the transfer of your UK pension to Ireland. There are many considerations and areas that need to be assessed and particularly around tax implications and whether you may be leaving valuable benefits behind.

The process is relatively straightforward for the client. Initially they can expect to spend an hour or so with MOJO Finance where all considerations are discussed. MOJO Finance will then furnish them with a statement of suitability which will outline their options, our recommendations, and the suggested next steps. Next steps for the client will be signing the application form.

Then it becomes a waiting game for roughly 6 or so weeks but it’s well worth it! You will now have complete control of your UK company pension with the opportunity for tax free growth within your new pension arrangement in Ireland.

Please feel free to engage the services of MOJO Finance when assessing your UK pension transfer options which should be coordinated with your full retirement plan.

MOJO Finance will transfer your UK pension to Ireland