# Pension scam? transfer from irl to UK & then New Zealand then back to irl



## unsure annie (15 Mar 2011)

Can this be done? Found a guy operating out of Spain stating it can be done and due to the legistlation here it can be done by transfering pensions to the UK and from there to New Zealand and then back into my bank account.

Sounds too good to be true, does anyone have any experience of this?


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## Guest105 (15 Mar 2011)

Do you want to move your pension from reland to the UK on to NZ then back again to Ireland?

maybe I am reading your post wrong either way if you were to do this it would cost you a fortune in exchange rates.

Be careful with that guy from Spain they are many scams going on out there


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## unsure annie (15 Mar 2011)

yeah seemingly it can be done due to legistlation here which means you can transfer your irish pension to a similar pension in the UK and if you send it then on to New Zealand it can be transfered back to your bank account.  

If it was as simple as they said surely everyone would be doing it - just things are tight, feel they'll pray on the needy!!


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## Brendan Burgess (16 Mar 2011)

There was some loophole which allowed this, but I think it has been closed. 

Not sure why New Zealand came into it.

You would have to be very careful. I don't like the sound of "some guy operating out of Spain". This could well be a scammer.

Brendan


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## Bronte (16 Mar 2011)

unsure annie said:


> Found a guy operating out of Spain


 
Doesn't this sentence alone give you goosebumps.  

Where and how did you find the buy operating out of Spain?


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## unsure annie (16 Mar 2011)

Thank you for your replies, I believe from what I've been told that New Zealand was being used as you can transfere out your full pension as long as your not living there.  This is more so being used to prove to my partner that this is probably not the best way to throw his pension away.


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## Complainer (16 Mar 2011)

unsure annie said:


> Can this be done? Found a guy operating out of Spain stating it can be done and due to the legistlation here it can be done by transfering pensions to the UK and from there to New Zealand and then back into my bank account.
> 
> Sounds too good to be true, does anyone have any experience of this?


Just to clarify - the purpose of these convoluted moves would be to give you access today to funds that are currently tied up in your pension until you retire - Yes?

If so, you need to consider the Irish taxation impacts first, regardless of what happens with the cash. You should also look into legal Irish options for early retirement.


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## kickstart (16 Mar 2011)

I think this sounds like classic scam territory to me. Some important red flags for me:

1. It involves a transaction that is unclear - why New Zealand? UK transfer? Agent based in Spain?
2. It seeks to establish the client in a morally ambiguous position.
3. It sounds too good to be true.

Point 1 is simple scam best practice - get the money out of the jurisdiction quickly, so all protection from the Irish police/financial regulator is immediately voluntarily surrendered. 

Point 2 is icing on the cake for the scammer. By getting you (or your husband) motivated to bypass legislation designed to stop you doing this, the scammer is trying to keep you from eventually going too public with your case. The fewer public reports of people being scammed, the longer he can run it.

Point 3 is self explanatory, and a universal financial rule.

For a bit more reading on it, I took a quick google on this particular type of transaction, by typing "new zealand pension scam" into google, and didn't have to dig much further than the second link (I'm too new to be allowed embed links in posts alas, so you'll have to take a gander yourself)

Without knowing anything about your specific case, I'd guess that someone who specialises in stealing from the UK market has figured there might be some business in nearby Ireland, and is using his existing scam infrastructure, and possible legislation permitting closer pension integration between the UK and Ireland.


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## Sunny (16 Mar 2011)

I have heard of this in the UK. There is something about the way NZ treats pensions but I can't remember the details. I don't think it is a scam as such but like the other posters say, I would be very very careful. Even if you are able to cash your pension as such (I am very doubtful) but you are very likely to still face a tax liability. Personally I wouldn't touch it. Doubt the Spanish Agent has your best interests at heart even if he is not trying to scam your money.


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## Bronte (17 Mar 2011)

If this was all real and legit why wouldn't Irish pension advisors be doing it.


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## Transferspec (17 Mar 2011)

*Ask an expert*

My attention was drawn to this thread - and I would like to put matters straight. 

I have 35 years as a pensions specialist - and we arrange perhaps 100 pension transfers a month - mainly from the UK to New Zealand as for long term non UK residents as NZ law allows 100% commutation for cash. 

Quite simply this is possible because it is how the law works. The UK law is found at SI 2006 / 206 and the relevant NZ law is the 1989 Superannuation Funds Act. 

So as an Irish pension fund (with some exceptions) may transfer to a UK pension fund (as both are in the EU), it is then possible to transfer from the UK scheme to a QROPS in NZ.

As the funds go from one pension company to another (in the UK) and then to NZ (where the NZ scheme is a trust based scheme) where on earth can the "scam" arise? 

The cash is paid from the NZ scheme after fees to the members bank account and under NZ law is a payment of capital. 

With regard to transfers originating in Ireland we make it clear in a formal recommendation letter that the client should seek tax advice in his country of residence.

I am not the adviser re this particular case - but as it happens am also based in Spain. And we are regulated in Spain through the CNMV which is the equivalent here of the UK FSA.


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## Brendan Burgess (17 Mar 2011)

Hi Spec

Thanks for that clarification



> long term non UK residents



Must the Irish person be a long-term resident of New  Zealand or just not long term resident in the UK? 

From the way it is being described here, it sounds as if New Zealanders can just cash their pension whenever they want? Presumably there must be some restriction on this? Do New Zealanders get tax relief on contributions to pension schemes?


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## Transferspec (21 Mar 2011)

Just long term non UK resident 

Non NZ residents have more flexibility than NZ resident members re encashment  - but even for NZ residents they will generally take benefit in lump sum form from the scheme retirement age.

there is no pension tax relief in NZ


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## Brendan Burgess (23 Mar 2011)

This letter from the Revenue has been brought to my attention by a pensions practitioner. Apparently, these were known in the trade as "Heathrwo ARFs"

Brendan

*[broken link removed] 
*

  Occupational Pension Scheme Transfer Issues. 23 September  2009 


Revenue letter to all Life Offices 


There are  concerns in relation to the use of certain transfer arrangements relating to  occupational pension schemes to circumvent current Revenue rules on the tax  treatment of retirement benefits. Typically, these arrangements involve transfer  payments to the UK and back again to Ireland. These arrangements purport to  facilitate access to retirement benefits prior to retirement, use of scheme  assets for investments prohibited in Ireland and the provision of ARF options to  individuals who do not qualify under Irish legislation. Transfers of this kind  are considered regulatory arbitrage. 

Under the provisions of section  772(4) (a), Taxes Consolidation Act, 1997, the following additional Revenue  approval condition will apply to all existing approved schemes (this will also  be a feature of all future approvals by Revenue): 

“All transfer payments  to an arrangement for the provision of retirement benefits outside the State  (i.e. an overseas arrangement) made from an approved occupational pension scheme  under the provisions of the Occupational Pensions Schemes and Personal  Retirement Savings Accounts (Overseas Transfer Payments) Regulations 2003, S.I.  No.716 of 2003, or received from such an arrangement by an approved occupational  pension scheme may be made or received to facilitate bona fide transactions  only” 

From the date of this letter, a transfer payment to an overseas  arrangement, or from an overseas arrangement (in respect of any residual amount  relating directly or indirectly to the original transfer) the primary purpose of  which is or was to enable a member of an occupational pension scheme to  circumvent the provisions of Part 30 of the Taxes Consolidation Act 1997 (TCA  1997) shall contravene this condition. 

The Revenue Commissioners will  initiate a compliance programme in relation to overseas transfers and where they  become aware that a transfer of this kind has been made or received they shall  invoke the provisions of section 772(5) of the TCA 1997 in relation to the  occupational pension scheme concerned. 
In that regard, an overseas transfer  payment made from or to an occupational pension scheme shall be deemed to have  contravened the condition until the contrary is demonstrated to the satisfaction  of the Revenue Commissioners. 



If any further clarification is  required, or if you would like to meet and discuss the issue, please contact  Seamus Carew, Financial Services (Pensions), Revenue. 
Tel. 6470710. lcdretirebens@revenue.ie


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## Bronte (24 Mar 2011)

Brendan Burgess said:


> . Transfers of this kind are considered regulatory arbitrage.


 
What does that sentance mean.  Are they trying to say that it is tax evasion or that it's illegal, but they're not sure it's illegal themselves so they use a vague term?

That letter doesn't come right out and say that doing the transfers are evasion, or illegal why not one wonders.


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## Brendan Burgess (24 Mar 2011)

Hi Bronte


My understanding is that they are saying that such an artificially constructed scheme is not allowed. 

I am not sure if doing it is classified as evasion, which is a criminal offence. 

Brendan


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## TheJackal (24 Mar 2011)

This is quite an interesting discussion.

Always a tricky divide between tax "planning" and tax "evasion"!

From my understanding of reading this:

You are using the laws of Ireland, which allow you to transfer your pension fund to UK.

You then use UK laws which allow you to move it to NZ.

The NZ laws seem to allow you to encash your pension whenever you want. This is because there is no pension tax relief for putting money into pension in the first place.

You then legally move your pension money, now cold hard cash, back to Ireland.

Yes, there are 3 foreign exchange rate risks (€ to £ to $NZ to €) but happy days, your pension has been cashed via a roundabout way.

The danger here is that this was clearly done to bypass the Irish tax system, which would not let you encash your pension funds early.

On the flip side, how will Revenue find out? And even if they do, they must get the cooperation of both UK & NZ authorities to access your relevant account details, etc.

They must then take you to court & hope to prove it was evasion!

Doubtful they would even bother, unless you were talking a few hundred thousand euro.


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## askalot (24 Mar 2011)

Brendan Burgess said:


> Transfers of this kind  are considered regulatory arbitrage.





			
				Bronte said:
			
		

> What does that sentance mean.



From Wiki :

In economics and finance, arbitrage (IPA: /ˈɑrbɨtrɑːʒ/) is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. 


Full wiki article here :

http://en.wikipedia.org/wiki/Arbitrage


Maybe others can decode the legality or otherwise from it. I can't!


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## TheJackal (24 Mar 2011)

Brendan Burgess said:


> From the date of this letter, a transfer payment to an overseas arrangement, or from an overseas arrangement (in respect of any residual amount relating directly or indirectly to the original transfer) the primary purpose of which is or was to enable a member of an occupational pension scheme to circumvent the provisions of Part 30 of the Taxes Consolidation Act 1997 (TCA 1997) *shall contravene this condition*.


 

I'm not sure they can simply state they regard this as a breach of TCA 1997. Court would have to decide this as it is not specifially noted in the Act.



> The Revenue Commissioners *will initiate a compliance programme in relation to overseas transfers* and where they become aware that a transfer of this kind has been made or received they shall invoke the provisions of section 772(5) of the TCA 1997 in relation to the occupational pension scheme concerned.
> In that regard, an overseas transfer payment made from or to an occupational pension scheme *shall be deemed to have contravened the condition until the contrary is demonstrated to the satisfaction of the Revenue Commissioners. *


 
Compliance programme? IMO, at most a random sample of high balances will be checked. They aren't interested in the average private pension balance.

Deemed to have breached the condition unless you prove otherwise. Is this allowed? Great way to avoid them having to do work & negates the trick situation they would be in trying to access your foreign account information, etc.


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## kickstart (25 Mar 2011)

TheJackal said:


> I'm not sure they can simply state they regard this as a breach of TCA 1997. Court would have to decide this as it is not specifially noted in the Act.



The Revenue Commissioners are more powerful in this regard than the Gardai. They can decide that you owe them money until you prove otherwise, possibly in court if you can't make them agree with you. Once they decide you owe money, they may also backdate fines and interest charges if they feel like it and if their discovery comes some time after the transaction. So, not a good position to be in, no matter how remote the possibility of them finding out. If it takes them a few years to find you, it just means you lose more money in the end.


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## Complainer (25 Mar 2011)

TheJackal said:


> Compliance programme? IMO, at most a random sample of high balances will be checked. They aren't interested in the average private pension balance.


Just like they weren't interested in the average offshore account in the 80s - right?


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## kickstart (25 Mar 2011)

Transferspec said:


> As the funds go from one pension company to another (in the UK) and then to NZ (where the NZ scheme is a trust based scheme) where on earth can the "scam" arise?



My apologies, Transferspec. It would seem my scam-radar is tuned a little bit too sensitively and I was wrong to be so certain it was not legitimate.


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## SPC100 (5 Oct 2011)

Hi Rory, 

Are you saying a "typical" irish citzen, resident and domiciled in Ireland, can choose to move their pension to the pension regime in a different country?

what are the costs for doing this?

Thanks,

Sean.


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