# Has anyone transferred his/her pension to Malta?



## jasdpace@gmail. (12 Apr 2022)

How did you get on? Who did you go with? Any other comments/advice?


----------



## jpd (12 Apr 2022)




----------



## deanpark (12 Apr 2022)

It has to be for a fund of over €100,000 or the technical term is cèad mile Malta.


----------



## noproblem (12 Apr 2022)

jasdpace@gmail. said:


> How did you get on? Who did you go with? Any other comments/advice?


Do you mean that you're going to live in Malta and want your old age pension from Ireland paid over there?


----------



## Dave Vanian (12 Apr 2022)

noproblem said:


> Do you mean that you're going to live in Malta and want your old age pension from Ireland paid over there?



I'm assuming that it's a reference to a transfer of a pension fund to Malta.  Here's an example.


----------



## jasdpace@gmail. (13 Apr 2022)

Thanks @Dave Vanian - that's exactly it.

What I'd like to know is how did people who did this get on, etc.

The point being that it seems to have many advantages:

- for sure........higher lump sum, greater flexibility
- possibly.......benefits for those otherwise impacted by the 200k cap?

It would seem to me that if the drawbacks are minimal then it's, at the very least an option, worth considering.
@Dave Vanian - I'd be very interested in learning whether you present this an option to your clients?


----------



## time to plan (13 Apr 2022)

Marc used to talk about Malta. Something about being non-domiciled but I forget the details as it want's my bag.


----------



## jasdpace@gmail. (13 Apr 2022)

Thanks time to plan,

I have seen the earlier thread that you contributed to along with Marc and others. I must admit that that thread doesn't shed sufficient light for me to consider actioning this - i.e. I'd need more comfort/info. Hence, my original question.

Thinking about this again, it would be nice for advisers generally to say whether or not they present this as an option to their clients and why they believe it is is ok/not ok to do so.


----------



## Oisin19 (13 Apr 2022)

you mention advantages of the Maltese pension. they all seem to be tax advantages which would would fall foul of the main revenue rule on overseas transfers. Are you planning on retiring abroad? general consensus is that this is only scenario that meets revenue rules


----------



## jasdpace@gmail. (13 Apr 2022)

Oisin19 said:


> you mention advantages of the Maltese pension. they all seem to be tax advantages



Not true Oisin! - One of the key advantages mentioned was flexibility - there is loads of credible material to support the argument that 4% is not a Safe Withdrawal Rate. Another, not previously mentioned, argument could be made for diversification. But, hey, I'm not the expert here.....I'm trying to get info from people who have done it or who give advice in this area.........lots of posts to date but no meaningful commentary from either of these 2 groups.


----------



## Dave Vanian (14 Apr 2022)

jasdpace@gmail. said:


> @Dave Vanian - I'd be very interested in learning whether you present this an option to your clients?



Personally, no I don't advise clients to move their funds to another country to avail of different retirement rules in that country.  I only give advice about products and pensions legislation that I am qualified and experienced to offer advice on - here in Ireland.


----------



## jasdpace@gmail. (14 Apr 2022)

Thanks Dave - that's fair enough and I appreciate your candour. I suspect that the majority of advisers behave similarly.

Just to elaborate on my perspective - I think that there must be a reasonable number of people who could benefit from understanding the merits of thinking beyond these shores - like people who wish to retire abroad or people with a non-Irish partner, or people who just wish to consider their broad options, etc. I honestly don't know how you can genuinely "advise" such people if you are unclear of what their true options are. Yes - you can arrange an ARF in Ireland for them but how can you be in any way confident that an ARF in Ireland is - within reason - the best approach?


----------



## Dave Vanian (14 Apr 2022)

jasdpace@gmail. said:


> Just to elaborate on my perspective - I think that there must be a reasonable number of people who could benefit from understanding the merits of thinking beyond these shores - like people who wish to retire abroad or people with a non-Irish partner, etc. I honestly don't know how you can genuinely "advise" such people if you are unclear of what their true options are. Yes - you can arrange an ARF in Ireland for them but how can you be in any way confident that an ARF in Ireland is - within reason - the best approach?



At any given time there are probably thousands of pension and/or investment opportunities available around the world that in theory could benefit people in Ireland.  I have lived and worked in Ireland all my life.  I am qualified and experienced to offer advice on Irish legislation and products.  I know how the system works here.  I don't hold myself out to be an expert on pensions legislation or products in other countries and my clients are aware from the outset that I offer advice on Irish pension products and legislation only.


----------



## dereko1969 (14 Apr 2022)

jasdpace@gmail. said:


> Thanks Dave - that's fair enough and I appreciate your candour. I suspect that the majority of advisers behave similarly.
> 
> Just to elaborate on my perspective - I think that there must be a reasonable number of people who could benefit from understanding the merits of thinking beyond these shores - like people who wish to retire abroad or people with a non-Irish partner, or people who just wish to consider their broad options, etc. I honestly don't know how you can genuinely "advise" such people if you are unclear of what their true options are. Yes - you can arrange an ARF in Ireland for them but how can you be in any way confident that an ARF in Ireland is - within reason - the best approach?


Way to go seeking advice by impugning the knowledge of someone who provides excellent advice on what they know, not what they don't know.
If I were Dave I'd been even more candid the next time!
How did you hear about the Maltese system? Why not ask those proposing it?


----------



## jasdpace@gmail. (14 Apr 2022)

Dave - as I said, I understand your position. I am not questioning your expertise on Irish pension products and legislation.

What I am saying is that I suspect that there is a cohort of people, as set out above, who might reasonably benefit from options beyond these shores. So my point is, in respect of these people, I cannot see how an adviser can be reasonably confident that a proposed course of action is best without a broader level of knowledge. Can you see my point, Dave?


----------



## Dave Vanian (14 Apr 2022)

jasdpace@gmail. said:


> Dave - as I said, I understand your position. I am not questioning your expertise on Irish pension products and legislation.
> 
> What I am saying is that I suspect that there is a cohort of people, as set out above, who might reasonably benefit from options beyond these shores. So my point is, in respect of these people, I cannot see how an adviser can be reasonably confident that a proposed course of action is best without a broader level of knowledge. Can you see my point, Dave?



I understand your point.  It's impractical.  Do you think Irish advisers should keep abreast of all pension and investment legislation and all financial products and investment opportunities in all countries at all times including all updates, in case some country somewhere introduces something that might be of benefit to some Irish clients?


----------



## jasdpace@gmail. (14 Apr 2022)

I believe that the approach you are describing is not the best approach for certain cohorts of clients. I will not repeat this point again. You are free to hold a different view.


----------



## Dave Vanian (14 Apr 2022)

I ask you again.  Do you think Irish advisers should keep abreast of all pension and investment legislation and all financial products and investment opportunities in all countries at all times including all updates, in case some country somewhere introduces something that might be of benefit to some Irish clients?


----------



## jasdpace@gmail. (14 Apr 2022)

I am not going down rabbit holes with you. The way you're angling your last few posts it's as if you think that I'm arguing that all advisers should know all details of all countries at all times. Give me a break. I believe that you are, understandably, taking a defensive position. Please don't ask any more questions, this dialogue is a waste of my time.


----------



## Itchy (14 Apr 2022)

Dave Vanian said:


> I ask you again.  Do you think Irish advisers should keep abreast of all pension and investment legislation and all financial products and investment opportunities in all countries at all times including all updates, in case some country somewhere introduces something that might be of benefit to some Irish clients?



Just the tax havens would be sufficient  



deanpark said:


> It has to be for a fund of over €100,000 or the technical term is *cèad mile Malta*.


 Underrated post


----------



## Dave Vanian (14 Apr 2022)

jasdpace@gmail. said:


> The way you're angling your last few posts it's as if you think that I'm arguing that all advisers should know all details of all countries at all times.



If that's not what you're suggesting, then what exactly are you suggesting?  You brought up Malta.  If I start recommending Malta to my clients, then how would I know that there's not some other country that might be even better?  If I don't do due diligence on all countries and products, then I wouldn't know.  If I didn't know that, then by recommending Malta I might not be offering the best solution.  Maybe some other country is better than Malta.

As you started this thread, please let us know what you think Irish advisers should be doing.


----------



## The Horseman (14 Apr 2022)

Surely the role of the advisor is to give advice on Irish products and the client obtains advice on products in the jurisdiction they are considering moving to from local advisors in that location. 

The client can then make an informed decision on which option is best.


----------



## Baby boomer (14 Apr 2022)

Wow, this thread has degenerated!  Which is a pity because the original question is an interesting one.  
It's obviously going to be a niche service and it would be highly unreasonable to expect all, or even most, Irish advisors to offer such a service.

However, that being said, I have been intrigued by a sort of "below the radar" approach by a small number of providers and advisors who are offering the service.  It's almost as if they're saying yes we can do this, but we don't want to draw too much attention to it.  Which is odd.  

There also has been very little reference to the _Michael O'Sullivan v Canada Life_ case, which the Irish High Court held that an employment or residence relationship with the transferee country (eg Malta) was *not* necessary for the transfer to be bona fide.  That would seem to have been a game changer, but yet, it seems there's been no huge increase in interest by pension providers and clients.

So, perhaps back to the original question.  Has anyone done this, and how did you get on?  Or has anyone explored the possibilities and decided not to to go ahead and why?


----------



## TheGoodTheBad (14 Apr 2022)

Baby boomer said:


> Wow, this thread has degenerated!  Which is a pity because the original question is an interesting one.
> It's obviously going to be a niche service and it would be highly unreasonable to expect all, or even most, Irish advisors to offer such a service.
> 
> However, that being said, I have been intrigued by a sort of "below the radar" approach by a small number of providers and advisors who are offering the service.  It's almost as if they're saying yes we can do this, but we don't want to draw too much attention to it.  Which is odd.
> ...


While you show the case and it states residence relationship or employement was NOT necessary for the transfer to be bona fide. In that instance what would make it bona fide to proceed with it.

I have no legal back ground, so I don't know, but I could imagine just because it says they are not necessary for it, that there is still a requirement for it for it to be bona fide and without a legal back ground I wouldnt be happy if I had to argue the case that it was without them. 
If someone is legit moving there etc fine, but if not and want to try avail it is a grey area I feel and that is why it isn't shouted from the roof tops by advisors. 
Just my opinion but doesn't help with any answer.


----------



## Itchy (15 Apr 2022)

Baby boomer said:


> There also has been very little reference to the _Michael O'Sullivan v Canada Life_ case, which the Irish High Court held that an employment or residence relationship with the transferee country (eg Malta) was *not* necessary for the transfer to be bona fide.  That would seem to have been a game changer, but yet, it seems there's been no huge increase in interest by pension providers and clients.






TheGoodTheBad said:


> While you show the case and it states residence relationship or employement was NOT necessary for the transfer to be bona fide. In that instance what would make it bona fide to proceed with it.



The case judgement only gives us a teaser, but it seems the _bone fides_ related to concerns around the economic climate, though it's not entirely clear. It seems the main thrust of the case related to the 'relevant benefits' of the Maltese scheme.



> The court also considered the implications of the bona fide requirement for overseas transfers.  Although Revenue argued that PRSA providers should examine the circumstances surrounding a declaration signed by a transferee to ensure that it is what it appears to be, the Court found that *in circumstances where the provider had no reason to suspect the bona fides of a transaction, the Transfer Regulations do not require a PRSA provider to conduct an independent examination and evaluation of the motives of the PRSA holder. * The Court found that unless there was something which caused the provider to be suspicious of the bona fides of the request, the provider is free to proceed with facilitating a transfer request.  The court did indicate, however, that it was not prepared to lay down a general rule in this regard and that everything would depend on the circumstances of a particular case.











						Court Paves The Way For Transfer Of PRSA Funds Abroad - Retirement, Superannuation & Pensions - Ireland
					

The Irish High Court recently provided some useful clarification in the area of the transfer of personal retirement savings accounts ("PRSAs") overseas.




					www.mondaq.com


----------



## Gordon Gekko (15 Apr 2022)

There are two ways to move one’s pension to Malta:

1) The conventional way (i.e. ‘Michael O’Sullivan vs Canada Life’)

2) Via ITC’s IORPS structure

Everything in life has risk. My own view is that if your own endgame is to land in Portugal in the very near future, the main risk in relation to ‘Option 1’ is counterparty risk. Some of the main protagonists in this space have family members who’ve literally stolen their clients’ money. ‘Sins of the Father’ etc, but when it comes to one’s life savings, please forgive me if I’m uber cautious.

Option 2 is interesting and predicated on Aidan McLoughlin’s view that the Treaty of Rome (i.e. ‘Free Movement of Capital’) facilitates complete pensions freedom. Intuitively, it sounds right, but ‘caveat emptor’ as with all things of this magnitude, and come into it armed with your own tax advisor (who isn’t ‘Johnny Down the Road’).

The basic plan is that one’s pension gets moved to Malta under either Option 1 or Option 2. Then the issue is accessing it.

Malta allows a 30% tax-free lump sum (with no cap) and then doesn’t tax drawdowns. Portugal doesn’t tax the lump sum and taxes drawdowns at 10%.

Ireland looks to tax everything for the first three years (under ‘ordinary residence’) unless you’ve sold your house and moved lock, stock and barrel to Portugal (for the pedants out there, I’m well aware that it’s more complex than that, but this isn’t a tax conference).

So the plan is:

- Move the pension to Malta
- Move to Portugal
- Retire the pension in either Year 1 or Year 4 depending on one’s circumstances


----------



## Baby boomer (15 Apr 2022)

Interesting, Gordon, thanks for that.  
When you say Ireland taxes everything for the first three years of ordinary residence, do you mean that even the 25% permitted by Ireland is included in that?  
Also, if you are non-resident, but ordinarily resident, are you not exempt from income tax on income arising totally outside Ireland - which a transferred pension would surely be?


----------



## Gordon Gekko (15 Apr 2022)

Baby boomer said:


> Interesting, Gordon, thanks for that.
> When you say Ireland taxes everything for the first three years of ordinary residence, do you mean that even the 25% permitted by Ireland is included in that?
> Also, if you are non-resident, but ordinarily resident, are you not exempt from income tax on income arising totally outside Ireland - which a transferred pension would surely be?


No, ‘ordinary residence’ (i.e. the three year ‘tail’) covers worldwide income and worldwide gains with a couple of carve-outs for employment income and de minimis amounts.


----------



## Oisin19 (15 Apr 2022)

"the 25% permitted by Ireland" is only from Irish pension schemes. A lot of people feel that the lump sum from Maltese pensions that was derived from Ireland is subject to full income tax. As Gordon alludes to, a specialist tax advisor in the area should be consulted.


----------



## Gordon Gekko (15 Apr 2022)

Oisin19 said:


> "the 25% permitted by Ireland" is only from Irish pension schemes. A lot of people feel that the lump sum from Maltese pensions that was derived from Ireland is subject to full income tax. As Gordon alludes to, a specialist tax advisor in the area should be consulted.


Yes.

Some people have a view that you can access a Maltese pension scheme on preferential terms whilst still living in Ireland.

I wouldn’t share that view.

It all makes sense if your plan is to live in Portugal, if you’ve done your due diligence on the counterparties, and if you have a decent advisor. In the absence of any one of those three points, it’s a disaster waiting to happen.


----------



## Oisin19 (15 Apr 2022)

Gordon Gekko said:


> Yes.
> 
> Some people have a view that you can access a Maltese pension scheme on preferential terms whilst still living in Ireland.
> 
> ...


completely agree. unless you are going abroad I wouldn't even consider it.


----------



## Conan (15 Apr 2022)

I am reminded of Celtic Tiger years when lots of people bought property in Bulgaria, Cape Verde etc. Most would struggle to find either location on a world map, knew little of the property laws, taxation rules etc.


----------



## Oisin19 (15 Apr 2022)

Conan said:


> I am reminded of Celtic Tiger years when lots of people bought property in Bulgaria, Cape Verde etc. Most would struggle to find either location on a world map, knew little of the property laws, taxation rules etc.


I once pulled up the world map in a meeting and asked the client to show me where Malta was. hadn't a clue and yet wanted to move his pension there


----------



## Baby boomer (15 Apr 2022)

Oisin19 said:


> "the 25% permitted by Ireland" is only from Irish pension schemes. A lot of people feel that the lump sum from Maltese pensions that was derived from Ireland is subject to full income tax. As Gordon alludes to, a specialist tax advisor in the area should be consulted.


Interesting indeed.  If a specialist tax advisor were to be consulted on the specific issue of whether 25% of a Maltese pot is taxable at Irish marginal rates, does anybody know what the advisor might say? 
Would that not contravene principles of EU law?  I should say I'm no expert in the area, but there seems to be great lack of information for a layman to even start thinking about this.


----------



## Brendan Burgess (15 Apr 2022)

Gordon Gekko said:


> It all makes sense if your plan is to live in Portugal, if you’ve done your due diligence on the counterparties, and if you have a decent advisor. In the absence of any one of those three points, it’s a disaster waiting to happen.



We should get this printed on the side of cigarette packets! 

It's very important.


----------



## jasdpace@gmail. (16 Apr 2022)

It is indeed, Brendan but where do you find a decent advisor - i.e. one who is competent in this area? Is it just the "big 4" or are there niche providers with sufficient depth of knowledge? Who do financial advisors refer people that wish to explore this area (cross border financial planning) to? What has been the outcome?


----------



## bish123 (16 Apr 2022)

Not a tax expert but here is my perspective on potential disadvantages - 

One should also consider possibility (albeit small) of European Union breaking up and that would mean staying in Malta forever to access funds. Who would have thought UK will leave EU, leaving thousands of UK pensioners stuck in Spain for rest of thier lives. And who would have thought there could be a war on the door step of EU. Not to mention pandemics are real and can happen again. 

In difficult times, for me, money saving (from tax man) isn't of much value than overall worth of staying near your family and friends.


----------



## jasdpace@gmail. (16 Apr 2022)

Very valid commentary but it could be years before Europe breaks up, if at all......in which case, one may very well have had the time to take appropriate actions. My fledgling understanding is that Malta (or elsewhere) does not have to be a forever home for pension funds and could potentially be used as a stepping stone in an overall strategy. That's why an earlier comment about just (read as: exclusively) seeking product advice in individual countries made absolutely no sense to me.........what's for sure needed is a very detailed strategy where all the dots are definitely joined by someone capable! Product advice is important but is a long-distant second to planning/strategy in all of this........the best products in the world won't be much good if the strategy is flawed.


----------



## Gordon Gekko (16 Apr 2022)

Yes, although the fund isn’t in Malta for all that long so the risk of EU breakup isn’t high (for example, the Brexit ‘journey’ took 4/5 years.

Plus, if the risk you’re worried about is EU breakup whilst the fund is in Malta, accessing it whilst in Portugal is not predicated on EU law; it’s based on the Portugal/Malta Tax Treaty which is standalone.


----------



## jasdpace@gmail. (17 Apr 2022)

I'd first of all like to thank Gordon for all the info.

For my sins, I was on the Pension Board site yesterday - they have a guidance note on overseas transfers. As I went through this, I realised that I don't know some very, very basic stuff, as follows.

1. What type of pension plans is it possible to transfer to another European country - as in retirement annuity, PRB, PRSA, occupational schemes?

2. What type of pension plan must the receiving scheme be - IORPS, QROPS, etc?


----------



## NotMyRealName (17 Apr 2022)

A brief history of Malta and financial services history. Population 45,000. Geographically very close to Sicily. Some people of pension age have trouble sleeping......this may not help.     Why the EU Is Furious With Malta - Bloomberg


			Bloomberg - Are you a robot?


----------



## Oisin19 (17 Apr 2022)

jasdpace@gmail. said:


> I'd first of all like to thank Gordon for all the info.
> 
> For my sins, I was on the Pension Board site yesterday - they have a guidance note on overseas transfers. As I went through this, I realised that I don't know some very, very basic stuff, as follows.
> 
> ...


A couple of points:

PRSA transfers are subject to income tax. 
PRBs can't transfer to Malta.
OPS is the scheme to transfer from.
The receiving scheme just has to provide relevant benefits etc. if it is to an IORPS no prior revenue approval is needed.
QROPS is mainly used for the UK.
Revenue interested in bone fide nature of transactions. a declaration has to be completed with them too.

Might be easier if you provide some background..


----------



## Dave Vanian (17 Apr 2022)

Oisin19 said:


> Revenue interested in bone fide nature of transactions. a declaration has to be completed with them too.



Would this not mean that unless you're actually moving to Malta then you cannot legitimately transfer your pension fund there?  Or am I misunderstanding the meaning of bona fide in this context?  (I learnt Latin in school but that's so long ago I think Julius Ceasar was speaking it as a first language at the time.)


----------



## Oisin19 (17 Apr 2022)

the Canada life case established that you don't have to be living or working in Malta. Most people feel you should be leaving Ireland though. 

Revenue guidance
Only bona fide transfers are acceptable. The use of certain transfer arrangements relating to occupational schemes, to circumvent Revenue rules on the tax treatment of retirement benefits (for example, transfer payments to the UK and back again to Ireland) are not permissible. When you get it into it most people want to get around revenue pension rules. 

What is interesting though, is that a lot of these transfers are to IORPS schemes which are occupational schemes in Malta. Bit unusual becoming a member of an OPS in a country you aren't living or employed in?


----------



## Steven Barrett (19 Apr 2022)

Why I don't offer transfers to Malta

Offering a transfer to Malta would involve a lot of research so that I feel comfortable in offering it to clients (including making sure that my PI covers it). It would also mean higher fees for clients for me to do it for them. It's not something that there is a high demand either. So as someone who runs their own business, I just don't see the return in offering this product given the work involved and the potential returns from it. I have enough work doing what I have expertise on already. 


Steven
www.bluewaterfp.ie


----------



## jasdpace@gmail. (20 Apr 2022)

Oisin19 said:


> A couple of points:
> 
> PRSA transfers are subject to income tax.
> PRBs can't transfer to Malta.
> ...



Thanks Oisin,

I've been doing a bit of digging on this. I'm not disagreeing with anything that you say here but a number of questions strike me, as follows:

1. The pension involved in the famous Canada Life case was a PRSA. So, was the taxation rule on transfers out of PRSAs introduced pre or post this case? What tax rate applies?

2. In order to transfer from an OPS, don't the trustees need the agreement of the majority of the members - meaning that this is highly, highly unlikely to be received in medium to large occupational schemes?

3. Doesn't SI 128 2021 mean that even transfers from OPSs to IORPs do require prior approval from the Pensions Authority?

4. As you say, how can an Irish lad join an "IORP" in Malta?


Personally, at this stage in my investigations, it seems like there are very (too?) many hurdles/walls in transferring to Malta even before getting into delicacies like domicile, good fides, etc. I may well be missing something!


----------



## jasdpace@gmail. (23 Apr 2022)

Oisin19 said:


> The receiving scheme just has to provide relevant benefits etc. if it is to an IORPS no prior revenue approval is needed.



One additional point about this. As it seems that transfers can only, effectively, come from OPSs (and small ones at that), the receiving scheme must be an IORP........there is no "if" (per the Pensions Authority)


----------



## Oisin19 (23 Apr 2022)

1. full income tax rates. I am not sure it always applied but by the way the tax rules are written id imagine so. Its written that all payments from a PRSA are taxable unless you can get an exemption...
2. Once you have a preserved benefit you have a statutory right to transfer from the scheme. I think you are reading about cross border schemes?
3. IORPS II brought in a change in this area. I believe you now have to inform the PA as well. I think you are reading about cross border schemes?
4. Doesn't really make sense to me. Thats why a lot of people go the non IORPS route.
5. the receiving scheme doesn't have to be an IORPS. Sure you could transfer your pension outside of Europe too.

As I said earlier if you provide some background we might be able to provide some guidance. Going into the level of detail on transfer regulations etc doesn't really help your situation. Its clear that you can transfer overseas. What is unclear is why you would do it or how it fits your financial goals etc


----------

