Glen1sland
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I am a UK citizen residing in ireland. I am in receipt of a police pension and injury on duty award. I have the pension paid into a UK account and pay tax on it in the uk. Am I liable for tax in Ireland?
Pension from UK but residing in Ireland - Irish tax due ?
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Steven Barrett
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I'm not a tax adviser but as far as I am aware, if you are resident and ordinarily resident in Ireland but not domiciled, foreign income is only assessed in Ireland when it is remitted ie if you leave it in the UK, it is not taxable but once you bring it into Ireland, it is. There is a double taxation agreement between Ireland and the UK, so any tax paid in the UK will be taken into account.
You should probably go see a qualified tax advisor on this, they will have it all sorted for you pretty quickly.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
You should probably go see a qualified tax advisor on this, they will have it all sorted for you pretty quickly.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
T McGibney
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Once you are Irish tax-resident, your UK pension is taxable here. Remittances etc are irrelevant. You are entitled to a tax credit against your Irish liability for tax any deducted in the UK.
AFAIK the fact that it is a police pension is relevant - government pensions are generally only only taxed in the country paying the pension.
I would recommend getting advice on both issues - the income generated by the injury on duty award may be tax free if certain conditions are met.
This seems to be more a tax question than a pension question, you might ask a mod to move forum.
I would recommend getting advice on both issues - the income generated by the injury on duty award may be tax free if certain conditions are met.
This seems to be more a tax question than a pension question, you might ask a mod to move forum.
I disagree with the answers at #2 and #3 above in respect of the pension element. (I have no idea about the injury on duty award). The Double Taxation Agreement between the UK and Ireland deals with government service pensions in Article 18. This was subsequently amended by the Irish Statutory Instrument 494/1998. This remains in force. Your police pension is classed as a government pension for DTA/SI 494 purposes. The relevant wording from SI 494/1998 (I am not allowed to post links, which irritates me beyond words. Web search "SI 494/1998"):
"(2) (a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority, in the discharge of functions of a governmental nature, shall be taxable only in that State.
(b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State."
Note that (b) kicks in (taxed in Ireland for a UK pension) only if you are Irish resident and an Irish national. The UK Inland Revenue classes police pensions as "government" for the purpose of DTAs. (Search the UK Inland Revenue site for "INTM343040" which categorises different public service pensions as government or not for DTA purposes).
I'm not qualified to give tax advice in Ireland, but I am a retired UK accountant now living here. My wife receives a UK government pension which is wholly taxed in the UK, with the Irish Revenue's agreement. (I have corresponded with, and obtained clearance from, the Irish Revenue for the treatment of my wife's UK government pension on Form 11. We are both Irish tax resident).
Paul
"(2) (a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority, in the discharge of functions of a governmental nature, shall be taxable only in that State.
(b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State."
Note that (b) kicks in (taxed in Ireland for a UK pension) only if you are Irish resident and an Irish national. The UK Inland Revenue classes police pensions as "government" for the purpose of DTAs. (Search the UK Inland Revenue site for "INTM343040" which categorises different public service pensions as government or not for DTA purposes).
I'm not qualified to give tax advice in Ireland, but I am a retired UK accountant now living here. My wife receives a UK government pension which is wholly taxed in the UK, with the Irish Revenue's agreement. (I have corresponded with, and obtained clearance from, the Irish Revenue for the treatment of my wife's UK government pension on Form 11. We are both Irish tax resident).
Paul
D
Dan Murray
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Thanks PM9999 - very helpful.
Would you mind posting a link please?
[Just kidding, presumably after x posts, you are granted this privilege? I'm just not sure what x is!]
What I found particularly interesting in your post is that it seems that "nationality" affects one's taxation treatment. I had thought that, in these islands at least, tax law was based on where one is resident, ordinary resident and domiciled. I suppose what I'm asking is what is the difference between being a national of or domiciled in a given state?
Would you mind posting a link please?
[Just kidding, presumably after x posts, you are granted this privilege? I'm just not sure what x is!]What I found particularly interesting in your post is that it seems that "nationality" affects one's taxation treatment. I had thought that, in these islands at least, tax law was based on where one is resident, ordinary resident and domiciled. I suppose what I'm asking is what is the difference between being a national of or domiciled in a given state?
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Glen1sland
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Thank you very much for your reply it was most helpful.
PM9999: Your post is a breath of fresh air--almost. Please clarify what you (and the tax treaty) mean by "national." I am a dual citizen about to retire to Ireland and receive a US teaching pension, i.e a government pension. The US-Irish tax treaty likewise differentiates between government and other pensions, but I do not see anything regarding "nationality." My pension will be taxed at source (by the US), while my Social Security will be be remitted to me untaxed by US, and then taxed in Ireland per the tax treaty (transaction reported on my US tax return.) For years, this has been my understanding. The really frustrating thing is that after consulting with two Irish accountants (one of which was recommended by the American Consulate in Dublin) they are both saying I have to pay Irish tax on all my income, and no US tax--which is just flat-out wrong! If I might impose further: how did you obtain clearance from Irish Revenue? Thanks so much.
PM9999: Your post is a breath of fresh air--almost. Please clarify what you (and the tax treaty) mean by "national." I am a dual citizen about to retire to Ireland and receive a US teaching pension, i.e a government pension. The US-Irish tax treaty likewise differentiates between government and other pensions, but I do not see anything regarding "nationality." My pension will be taxed at source (by the US), while my Social Security will be be remitted to me untaxed by US, and then taxed in Ireland per the tax treaty (transaction reported on my US tax return.) For years, this has been my understanding. The really frustrating thing is that after consulting with two Irish accountants (one of which was recommended by the American Consulate in Dublin) they are both saying I have to pay Irish tax on all my income, and no US tax--which is just flat-out wrong! If I might impose further: how did you obtain clearance from Irish Revenue? Thanks so much.
@dtmg27
I'm not qualified to advise formally, so please accept anything I say as the opinions of an educated layman. "National" is a direct quote from the treaty between Ireland and the UK. I take it to mean citizenship. Example: an Irish citizen, retiring to Ireland (and tax resident in Ireland), receiving a UK government service pension would pay tax on that pension only in Ireland. Conversely, a UK citizen retiring to Ireland (and tax resident in Ireland), receiving a UK government pension would pay tax on that pension only in the UK. (This second case is exactly my wife's situation). All vice versa for individuals retiring to the UK.
A quick look at the Ireland/USA DTT suggests that there is a similar provision. Look at Article 19, para 2:
"a. Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
b. However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State."
It is unhelpfully silent on the case where a pension recipient has dual citizenship/nationality. This may be at the root of the unexpected advice from your accountants. As you will be resident in Ireland and a citizen/national of Ireland (albeit also a US citizen), they think perhaps that you fall under Article 19, 2b and not 2a for your US teaching pension.
My "clearance" was simply obtained by me writing to the Irish Revenue Commssioners in advance of our first tax return in Ireland. I spelled out our circumstances (nationality, tax residence, pension sources) and said that, after reading the DTT, my understanding was that pensions A,B,C would be taxed in the UK and pensions X,Y,Z in Ireland. Did they agree? A letter came back fairly promptly agreeing with my assumptions, and I submitted my first Form 11 income tax return accordingly.
I would suggest that you write to the Revenue Commissioners explaining your own circumstances and the advice received. Ask them how they think you should be taxed, and take it from there. In my limited experience of dealings with the Irish tax authorities, I've found them genuinely helpful (more so than HMRC in the UK and 100 times more so than in Greece where we lived just before retiring to Ireland). As a belt and braces job, perhaps send a copy of anything you do get back from Ireland to the IRS and ask for their agreement?
Good luck with it.
Paul
Edit: From Article 3 (Definitions) of the Ireland/USA DTT "i. the term "national" in relation to a Contracting State, means any citizen of that State and any legal person, association, or other entity deriving its status as such from the laws in force in that State;"
I'm not qualified to advise formally, so please accept anything I say as the opinions of an educated layman. "National" is a direct quote from the treaty between Ireland and the UK. I take it to mean citizenship. Example: an Irish citizen, retiring to Ireland (and tax resident in Ireland), receiving a UK government service pension would pay tax on that pension only in Ireland. Conversely, a UK citizen retiring to Ireland (and tax resident in Ireland), receiving a UK government pension would pay tax on that pension only in the UK. (This second case is exactly my wife's situation). All vice versa for individuals retiring to the UK.
A quick look at the Ireland/USA DTT suggests that there is a similar provision. Look at Article 19, para 2:
"a. Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
b. However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State."
It is unhelpfully silent on the case where a pension recipient has dual citizenship/nationality. This may be at the root of the unexpected advice from your accountants. As you will be resident in Ireland and a citizen/national of Ireland (albeit also a US citizen), they think perhaps that you fall under Article 19, 2b and not 2a for your US teaching pension.
My "clearance" was simply obtained by me writing to the Irish Revenue Commssioners in advance of our first tax return in Ireland. I spelled out our circumstances (nationality, tax residence, pension sources) and said that, after reading the DTT, my understanding was that pensions A,B,C would be taxed in the UK and pensions X,Y,Z in Ireland. Did they agree? A letter came back fairly promptly agreeing with my assumptions, and I submitted my first Form 11 income tax return accordingly.
I would suggest that you write to the Revenue Commissioners explaining your own circumstances and the advice received. Ask them how they think you should be taxed, and take it from there. In my limited experience of dealings with the Irish tax authorities, I've found them genuinely helpful (more so than HMRC in the UK and 100 times more so than in Greece where we lived just before retiring to Ireland). As a belt and braces job, perhaps send a copy of anything you do get back from Ireland to the IRS and ask for their agreement?
Good luck with it.
Paul
Edit: From Article 3 (Definitions) of the Ireland/USA DTT "i. the term "national" in relation to a Contracting State, means any citizen of that State and any legal person, association, or other entity deriving its status as such from the laws in force in that State;"
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This is tremendously helpful and awesomely prompt. You have indeed narrowed the question of nationality to citizenship, which I get. And while I need to confirm it, I think the US will supplant any Irish claim to tax on my US government pension short of me renouncing that citizenship. (Probably why they allow the Irish tax on SS--about a quarter of my projected retirement income!) I'll post again when I get further clarification. And again, thanks.