# Transferring 401k to Pension Scheme in Ireland



## GerryD 2 (5 Jan 2005)

I have recently returned to Ireland after 10yrs in U.S. I have a 401 k plan. I would like to know what the best options are...should I just let it sit there or roll it over into  an IRA account..or open an pension/account over here  with an established pension broker. My may concern is will I be taxed at either end( ie..taking the money out of U.S and/or taxed bringing it into Ireland. Also, with the exchange rate at the moment..I am not in any hurry to bring it over.I am looking for advice and contact names of companies that deal with this kind of thing, regardless of whether any persons work with these establishments or not!.The information is for my personal use only. Thanking you in advance!.


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## Max Hopper (5 Jan 2005)

Although the US and Ireland have executed a tax treaty, it covers only income not retirement. Therefore if/when you [broken link removed], you will be subject to tax withholding (*20%*) and penalties (*10%*) if the _lump sum distribution_ is not _rolled over_ into a recognised (IRS-wise) account. PRSAs *do not* qualify.<!--EZCODE BR START--><!--EZCODE BR END--><!--EZCODE BR START--><!--EZCODE BR END-->You are also required to claim the distribution on your next IRS 1040 tax return so that any tax rate above the nominal 20% withheld at distribution is paid. Effectively you could pay *45%* of the 401k account balance in taxes and penalties.<!--EZCODE BR START--><!--EZCODE BR END--><!--EZCODE BR START--><!--EZCODE BR END-->Recommendations: <!--EZCODE LIST START--><ul><li>If the 401k administrator offers internet access and changes to the account, leave it alone until age 59½. </li><li>Or _rollover_ the lump sum into a tax-deferred IRA that *does* offer internet access / changes.</li></ul><!--EZCODE LIST END-->


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## GerryD 2 (6 Jan 2005)

Thank you for your advice...which I will have to give some thought.


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## dubinamerica (21 Jan 2005)

I have heard that there could be an issue if a non-resident attempts to pull their money from the 401K account and end up getting taxed @ 30% (plus penalty).. Max - do you know if the tax paid is dependent on other earning and deductions or a set % ?  If it's based on other earnings would it make sense to take this the year that you have a lot of deductions ?  I'm in a similar position with a 401K here in the U.S. and I'm considering just leaving it for a while but I'm also concerned about future changes in the tax laws (59 1/2 is still a while away yet ) and also moving money out of the country . I'm not sure if moving more than 10K will send up a red flag and maybe cause an issue ..     It's all so taxing to my brain...


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## Max Hopper (22 Jan 2005)

, the IRS does not GAT if you are a US national or not. All they are after is your dough.<!--EZCODE BR START--><!--EZCODE BR END--><!--EZCODE BR START--><!--EZCODE BR END-->Early withdrawal triggers the 20% _back-up withholding tax_ along with the 10% penalty. The penalty is just that. If your US income falls in a bracket above 15% then you are liable for the difference between the 20% and your bracket _on the entire value of the 401k._<!--EZCODE BR START--><!--EZCODE BR END--><!--EZCODE BR START--><!--EZCODE BR END-->N.B. In 2004 there are 6 brackets (10/15/25/28/33/35)<!--EZCODE BR START--><!--EZCODE BR END--><!--EZCODE BR START--><!--EZCODE BR END-->HTH


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## dubinamerica (22 Jan 2005)

Thank you . I'll be meeting with the tax person soon for the usual April panic here in the U.S.   I'll see if she can nail down some figures for me based on previous years taxes. Thank you .


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## finnsfort (25 Feb 2015)

GerryD 2 said:


> I have recently returned to Ireland after 10yrs in U.S. I have a 401 k plan. I would like to know what the best ow options are...should I just let it sit there or roll it over into  an IRA account..or open an pension/account over here  with an established pension broker. My may concern is will I be taxed at either end( ie..taking the money out of U.S and/or taxed bringing it into Ireland. Also, with the exchange rate at the moment..I am not in any hurry to bring it over.I am looking for advice and contact names of companies that deal with this kind of thing, regardless of whether any persons work with these establishments or not!.The information is for my personal use only. Thanking you in advance!.


Hi Gerry D i know its a long time ago but did you resolve this? i am in a similar situation, worked in the us from 1996 to 2002 and have never done anything about this


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## sanne (29 Aug 2015)

Would also love to know what experiences anyone else had had with this issue.  I am also planning to move 401k money back to ireland and deal with the taxes now.  I am doing this to take advantage of the strong dollar rather than risk doing this in 20 years time when the U.S. Dollar fx could be less favorable. I am ok paying the tax on the distribution in the U.S. as that's where the money was earned.  So I will be including the distribution as U.S. Income when I file my taxes next year.  

Here is where I am concerned..... What happens if the revenue here in ireland see the money arrive in my Irish account and get suspicious.  Could it prompt questions and might they claim I owe MORE taxes than what I have already paid?


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## Democrat (24 Jul 2017)

Sanne and finnsfort: I would like to know you managed the repatriation of 401K money back to Ireland. I am in the same situation. I presume that the tax will be taken at the Irish side since I no longer file a tax return in the USA. Does one alert revenue beforehand and take the marginal tax and USC hit?


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## eileen7658 (14 Sep 2017)

Hi.  I was wondering if anyone received information on this.  I just moved to Ireland on a permanent basis.  I left my 401K at home in the US.  Is it more beneficial to leave it there or transfer over?  Do they offer the same invest accounts over here so the money can grow?  Any advice on taxes?  Thank you in advance.  Any help will be appreciated.


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## Merowig (14 Sep 2017)

Fees in the US are usually lower than in Ireland. Investment options in Ireland are as well more limited.


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## Steven Barrett (15 Sep 2017)

eileen7658 said:


> Hi.  I was wondering if anyone received information on this.  I just moved to Ireland on a permanent basis.  I left my 401K at home in the US.  Is it more beneficial to leave it there or transfer over?  Do they offer the same invest accounts over here so the money can grow?  Any advice on taxes?  Thank you in advance.  Any help will be appreciated.



Working on something for a client who is in a similar position. As far as I can see, you can't transfer a 401(k) to a pension scheme in Ireland. You can cash it in and pay tax in the US (and a 10% penalty if before age 59.5). When I find a solution, I will post it up here. 

And yes, charges are usually lower due to economies of scale. 


Steven 
www.bluewaterfp.ie


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## Gordon Gekko (15 Sep 2017)

Hi Steven,

I looked at this a while back. It can't be transferred.

Gordon


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## Steven Barrett (15 Sep 2017)

Thanks Gordon

I didn't think so. You can cash it in though and pay income tax on it and a 10% penalty. Not very efficient. 


Steven 
www.bluewaterfp.ie


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## flmayo (19 Sep 2017)

Where would the income tax be deducted for a 401K if you reside in Ireland? We'll be moving back next year to live in Ireland permanently.


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## flmayo (11 Jul 2018)

Im wondering if any one has any updates on this issue My wife moved back recently, we are still trying to figure out what the best options are for her 401K. The company that manage her 401K are suggesting that we withdraw it now and take the penalty as the penalties are higher if she waits due to her no longer being a permanent resident in the U.S.


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