Non-standard PRSA & Tax on US ETFs Query

Michelle86

Registered User
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Apologies if this has been dealt with previously, I'm new to the forum and have found it very interesting. I'm looking to set up a pension/PRSA and have been thinking about going with the non-standard one from Davy. I'm a private sector PAYE worker but my employer does not make contributions to the PRSA on offer so that's why I have been looking around myself and trying to learn more.

My dad has suggested US ETFs as one option but one thing I've seen mentioned is dividend withholding tax and also accounting for tax on dividends on these ETFs in Ireland. This is where I've been getting confused. If you invested in a US ETFs as part of your PRSA do you have to file returns with Revenue here for profits and how do you determine those profits exactly? Ideally I would not want the dividend paid but to be automatically reinvested but I think it had been mentioned somewhere about 'taxable events' and you would need to account for tax. I understand the tax breaks for investing in a PRSA but don't fully understand the taxation of what you invest in under a PRSA and if anyone had further information on that it would be greatly appreciated as just would be interested to understand the basics of that side of things.

I may have left it to late but it was also my understanding that if I invest a sum this year before the November online deadline I can claim that as a pension payment for 2015 and get tax back for 2015 even though I'm only making the payment in 2016.

Thanks
 
The only thing you have to report to the Revenue for the PRSA is the contributions paid so you can claim tax relief on the premiums. The fund manager deals with all the tax within the fund, it what they get paid for.

Pension funds are reported to grow tax free but taxes such as the witholding tax in the US are still deducted as the provider in the US doesn't give two hoots about Irish pension laws. You will probably find that the Irish provider does not try to claim back the witholding tax either.

Steven
www.bluewaterfp.ie
 
Not an answer to your question, but just in case you haven't seen another factor to consider with US ETFs mentioned here previously, in the case of your death they are subject to 35% US Estate Tax on amounts over $60k, without offsetting against Irish tax. Posted here:

http://www.askaboutmoney.com/thread...or-irish-residents.188821/page-2#post-1416010

I think there is other advice relevant to your question on that same thread.
Thanks for the link. I wasn't sure if there was a difference in tax treatment if you were investing in foreign ETFs as part of a PRSA as opposed to just buying them as a general investment.
 
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