Dual US Irish Citizenship - what are the issues?

[jdwex]

I have dual Irish/US citizenship. I do make a US tax return every year to be compliant as I travel there (on US passport) every few years mainly to visit family.
I pay about 5% of basic pay, and company pays about 10%, into a DC pension scheme (performance related pay isn't used to calculate pension contributions).
If I wasn't a US citizen there would not be an issue with a tax free lump sum on retirement, but someone told as a US citizen (though also Irish), there would be in my case/
Is this true? And if so, what is the best approach to take towards my pension, especially the lump sum. Should I asked for it to be drawn down in the year after I retire. BTW this is quite a while away, I am 53.

 

[Steven Barrett]

Yes, as a US citizen your tax free lump sum is subject to taxation in the US. Your US tax advisor may be able to report some of it as a severance payment. You would need to talk to them. I don't know how the lump sum is taxed though.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[Marc]

There is a substantial body of work here.

Your Irish DC pension may be completely unsuitable for you as a US Citizen. Many employers in Ireland are considering setting up a separate DC scheme in a jurisdiction better suited to the issues (ie with a better double tax treaty) and enrolling their non-irish employees into a separate scheme.

Furthermore you should not invest in any European investment funds especially outside of a pension due to the PFIC reporting obligations.

One of the isses here is that Schwab for example has just written to all European clients stating that they can no longer buy the most suitable investments, US ETFs, due to European Regulations (PRIIPS) which prevent retail investors buying investments that are the most suited to their situation.

There are a very large number of people in your position and many are very unhappy about all this.


www.globalwealth.ie