Non residents - risk of no ARF option

I have also recently found the article on changes on ARF taxation and Im shocked that revenue now that pension contributions is obligatory since 2024 has done nothing to resolve this mess on ARFs for non nationals or nationals looking to retire abroad.To transfer your pension abroad before you retire is the answer in paper however it cannot be done today with many EU countries coz the benefits need to be similar n that does not happen with countries like Spain or France (ive done some research on it).

Currently pension groups only do transfers with the UK. I cannot confirm this 100pc but i have been told already by 2 schemes they dont provide the service and that they dont know who provides it in Ireland. To do a transfer within the EU is too complex and thats why no provider wants to do it unfortunately.
 
VInterested said:
I have also recently found the article on changes on ARF taxation and Im shocked that revenue now that pension contributions is obligatory since 2024 has done nothing to resolve this mess on ARFs for non nationals or nationals looking to retire abroad.To transfer your pension abroad before you retire is the answer in paper however it cannot be done today with many EU countries coz the benefits need to be similar n that does not happen with countries like Spain or France (ive done some research on it).

Currently pension groups only do transfers with the UK. I cannot confirm this 100pc but i have been told already by 2 schemes they dont provide the service and that they dont know who provides it in Ireland. To do a transfer within the EU is too complex and thats why no provider wants to do it unfortunately.
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Yes, it’s terrible, isn’t. All these people who got tax relief from the Irish State are being prevented from transferring their pensions out of Ireland and trousering the cash tax-free.

ARF it before you go and while you have an Irish address. Then pay your taxes in Ireland where you got the tax relief.
 
Gordon Gekko said:
Yes, it’s terrible, isn’t. All these people who got tax relief from the Irish State are being prevented from transferring their pensions out of Ireland and trousering the cash tax-free.

ARF it before you go and while you have an Irish address. Then pay your taxes in Ireland where you got the tax relief.
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I'm good with that as long as you dont get landed with additional tax liabilities in the country you move to which I suspect is not always the case.
 
Being able to transfer your pension abroad very much depends on what type of pension it is in. The best option is leaving it in an occupational pension scheme.
  1. If the money is in an Occupational pension scheme, a transfer may be possible to a IORPS scheme.
  2. If the money is in a PRSA, a transfer may be possible to a IORPS scheme but it may trigger a tax liability.
  3. If benefits are in a Buy Out Bond, a transfer is not possible and you can only transfer these benefits to the UK.
I have implemented an ARF for someone living in the UK with ITC. Not sure if they will do it for those living in other EU countries or the US, it's not something that I deal with that often.

The US is always difficult to deal with. Try to invest in the EU if you are a US citizen and do your tax returns!! No one wants to take your money and it ends up being very expensive as the taxes you pay every year on your investments to the IRS aren't offsetable against the taxes you pay in Ireland.
 
Gordon Gekko said:
Yes, it’s terrible, isn’t. All these people who got tax relief from the Irish State are being prevented from transferring their pensions out of Ireland and trousering the cash tax-free.

ARF it before you go and while you have an Irish address. Then pay your taxes in Ireland where you got the tax relief.
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There's no consistency, it's not the same situation for annuities. There's no rule or even expectation that tax relief must be repaid - usually it won't be as the income level isn't high enough. (I'd distinguish between regular mainly self funded DC pensions versus pensions where the employer side is doing most of the work.)

Revenue solo runs are a problem, taxing authorities in other countries can be even worse than Revenue. If something is unusual or unique to Ireland it's a problem when you go to explain especially if you're not at native level in that language.

Gordon Gekko said:
You wouldn’t. Taxes higher than Irish taxes aren’t really a thing!
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Taxes higher than Ireland are a thing at lower to middle Irish incomes, especially in countries with a lower cost of living where someone with a small or medium sized ARF might choose/need to live. People retiring are moving down the income ladder usually.

The problem is the lack of clarity on double taxation, getting taxed in Ireland would often be preferable.
 
I believe very few double tax agreement treaties explicitly mention ARFs. So, there's a risk that you pay the tax in Ireland on your distribution and that's not recognized in your new country of residence and they demand that you pay local tax on the same distribution. Could get very expensive.
With an annuity, you can get an exemption from paying the tax in Ireland and then just have to pay the tax in your new country of residence.
 
Gordon Gekko said:
Yes, it’s terrible, isn’t. All these people who got tax relief from the Irish State are being prevented from transferring their pensions out of Ireland and trousering the cash tax-free.

ARF it before you go and while you have an Irish address. Then pay your taxes in Ireland where you got the tax relief.
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No. Thats not the problem at all. You are going to pay taxes anyway and i wld not have any issue if it was paid in Ireland. But why would you have to pay the highest % (on the whole distribution) and not being able to use an ARF in Ireland and get your distribution paid in a SEPA account from another EU country after tax?

Also and this for you to be aware. This issue affects Irish people too not only non nationals. Do you know how many Irish people are living in Spain n France using great social services without having contributed to any of them?? If they have a pension in Ireland im sure they will also wld prefer to be able to use their ARF rather than having to cash it fully in one go before living.
 
VInterested said:
No. Thats not the problem at all. You are going to pay taxes anyway and i wld not have any issue if it was paid in Ireland. But why would you have to pay the highest % (on the whole distribution) and not being able to use an ARF in Ireland and get your distribution paid in a SEPA account from another EU country after tax?

Also and this for you to be aware. This issue affects Irish people too not only non nationals. Do you know how many Irish people are living in Spain n France using great social services without having contributed to any of them?? If they have a pension in Ireland im sure they will also wld prefer to be able to use their ARF rather than having to cash it fully in one go before leaving
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VInterested said:
No. Thats not the problem at all. You are going to pay taxes anyway and i wld not have any issue if it was paid in Ireland. But why would you have to pay the highest % (on the whole distribution) and not being able to use an ARF in Ireland and get your distribution paid in a SEPA account from another EU country after tax?

Also and this for you to be aware. This issue affects Irish people too not only non nationals. Do you know how many Irish people are living in Spain n France using great social services without having contributed to any of them?? If they have a pension in Ireland im sure they will also wld prefer to be able to use their ARF rather than having to cash it fully in one go before living.
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I don’t understand your post, sorry.
 
BingCrosby said:
I've already asked around in my employer (big multinational) and gotten ~50 people who are in the same boat. So I agree there are likely thousands in this situation. I've already left Ireland and so the best I could do here is to try to use the Irish address when the time comes to get the ARF (again I'm not recommending this, at best its likely playing loose with the rules)

My current plan is to ask our fund admin for options - I suspect they will make some sort of ARF available that meets the revenue reporting, but will charge mightily for it (I dont blame them, the reporting requirements are tough).

I also plan to pursue all the encashment options.

I'll happily share what I find out but would echo the question - where would a group (of 50 of us now). Get advice on our options.

As to the broader problem "Global Mobility" where this uncertainty makes Ireland less attractive - I'm not much of activist but it seems like a more formal representation to revenue/finance by the large multinationals would be warranted. What's involved in that ?
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Hi, did you find out more about this issue?
I have done some research and i know that very few EU countries will accept a transfer of an ARF furthermore (Malta yes, Spain and France no unless its a DB pension) no one will offer you in Ireland an ARF if you are a non-resident.
Ive been told by my Occupational Pension provider that the advice given to their members in other companies is to eventually buy an annuity or use an Irish bank as mentioned before.

The problem is that there is no like to like schemes in other EU countries and the taxation is too complex so they dont want to bother providing this service.
 
Steven Barrett said:
But you will have to keep an Irish bank account as they will only make payments to an account with an IBAN number, so they will not make payments to a US bank account. The US will also tax you on your lump sum payment.
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Several neobanks have the option of EUR inbound via an EU IBAN and then you transfer via app to a dollar wallet with same neobanks and spend/withdraw/transfer in USD.

Not sure if they are open to US residents though.
 
This is kind of crazy if ARFs can't be sold to non-residents because of Revenue taxation rules. This will affect a vast number of people who have worked for some of their careers in Ireland. I have a small (currently ca. 100k) DC pot that I was expecting to buy an ARF with but I live in Germany. Ireland even has a double taxation treaty with Germany that covers ARFs! I was expecting tax treatment to not even be a problem but it seems actually getting the ARF might well be. I will leave it invested as long as I can I suppose and hope that the situation is resolved before I am forced to make that decision.
 
murphaph1 said:
This is kind of crazy if ARFs can't be sold to non-residents because of Revenue taxation rules. This will affect a vast number of people who have worked for some of their careers in Ireland. I have a small (currently ca. 100k) DC pot that I was expecting to buy an ARF with but I live in Germany. Ireland even has a double taxation treaty with Germany that covers ARFs! I was expecting tax treatment to not even be a problem but it seems actually getting the ARF might well be. I will leave it invested as long as I can I suppose and hope that the situation is resolved before I am forced to make that decision.
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You can't expect ARF providers to be able to sell a financial product to a resident of every country in the world. They'd need to be authorised to sell there, they'd need to be compliant with the local legislation,.need to be aware of and compliant with tax rules while also complying with Irish tax rules and any tax treaties between the countries. It's a lot of effort and expense for little to no reward.
 
Fortune said:
You can't expect ARF providers to be able to sell a financial product to a resident of every country in the world. They'd need to be authorised to sell there, they'd need to be compliant with the local legislation,.need to be aware of and compliant with tax rules while also complying with Irish tax rules and any tax treaties between the countries. It's a lot of effort and expense for little to no reward.
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But why would the Irish state bother to instigate changes to the existing DTA to cover ARFs if the purpose wasn't to allow ARFs to be sold to residents of those countries? There is no difference to the Irish exchequer if I retire in Ireland aged 60, buy and ARF and then head to Germany (an unlikely retirement location but whatever) or if I leave Ireland aged 30 and head to Germany and buy an ARF aged 60. There is literally no difference in the tax take. It is taxable in Ireland in either case. For clarity, I am NOT blaming the ARF providers here. I am blaming Revenue and or the government for the rules not being amended to at least allow the ARF providers to sell ARFs to residents of countries where the DTA explicitly covers ARFs.
 
murphaph1 said:
But why would the Irish state bother to instigate changes to the existing DTA to cover ARFs if the purpose wasn't to allow ARFs to be sold to residents of those countries? There is no difference to the Irish exchequer if I retire in Ireland aged 60, buy and ARF and then head to Germany (an unlikely retirement location but whatever) or if I leave Ireland aged 30 and head to Germany and buy an ARF aged 60. There is literally no difference in the tax take. It is taxable in Ireland in either case. For clarity, I am NOT blaming the ARF providers here. I am blaming Revenue and or the government for the rules not being amended to at least allow the ARF providers to sell ARFs to residents of countries where the DTA explicitly covers ARFs.
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Even if you ignore tax, you're still expecting ARF providers to be authorised by the relevant authorities of every country to sell financial products to their residents.
 
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