Strategic transfer of pension overseas

My difficulty with this approach is that it seems to be dependent on my claiming that I am not domiciled In Ireland - like Marc I am British and spend most of my life in the UK. Now I may be able to defend a claim that I am not domiciled in Ireland but it doesn’t sit right with me.

One of my first clients early in my career was a Labour MP who didn’t “believe” in the Stockmarket. That didn’t make it any less valid for me to invest in the Stockmarket.

And I think it’s important to stress that the commission for taxation when looking at the question of domicile described the situation as “anachronistic”

But the fact remains that the precedent is there for those that simply choose to avail of it

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue.”

Lord Clyde in the case of Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764:

Tax considerations are often a matter of personal choice.

We often talk about “claiming our allowances” and we know that many people fail to do so.

Often that is simply down to a failure to seek timely professional advice. Here the role of the professional and the personal values of an investor need to be aligned.

As professional advisers we are bound to excercise a fiduciary duty to our clients and to always act in their best interest.

In a self-assessment tax system like Ireland the professional adviser provides guidance so that things “sit right” with investors but at the end of the day it is ultimately the taxpayer who signs the declaration.

Speaking as an expert in the subject, it is a matter of undeniable and categoric fact that @time to plan had a U.K. domicile of origin just as my children who were born in the Rotunda and have Irish passports have a U.K. domicile as they take the domicile of their Father.

However, over time it is necessary to assess if a taxpayer has actively taken steps to give up their Domicile of origin and acquire a domicile of choice. So again, professional advice is a necessary condition of an answer at a point in time.

But leaving all that aside, the O’Sullivan case established that it is not necessary for a taxpayer to move themselves out of Ireland in order to legitimately move one’s pension.

But if you are domiciled in Ireland and dealing with the revenue commissions here and wish to retire and continue to live in Ireland - I can’t see how one can shift their pension to Malta.

As Conan asks - what might be a bona fide reason ? I can’t think of one....

I do believe if you are going to leave Ireland and retire overseas then Malta is an option for your pension.

But if you wish to stay in Ireland I can’t seem to find a reason as to why you’d be allowed.

Prehaps Marc doesn’t want to give away his knowledge for free - and that’s understandable- but you might confirm Marc if it is possible to retire in Ireland , live in Ireland but have your pension in Malta. Thank you.

Yes, its absolutely possible to retire in Ireland, be Irish Resident and Irish Domiciled and move your pension to Malta. These principles are enshrined at an EU level under the free movement of capital.

Marc said:

Yes, its absolutely possible to retire in Ireland, be Irish Resident and Irish Domiciled and move your pension to Malta. These principles are enshrined at an EU level under the free movement of capital.

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Marc, you seem to be suggesting that so long as a provider believes that the client has not got an “un-bona fide” reason to transfer, then it’s ok. Seems like trying to prove a negative.
I have seen some “advisors” in this space advocating a move to the likes of Malta on the basis that one can access 30% as a tax free lump sum (rather than 25% in Ireland) or that you can access funds from age 50.
So “bona fide” reasons seems to be in the eye of the beholder. If I believe it is “bona fide”, it is?

Conan said:

So “bona fide” reasons seems to be in the eye of the beholder. If I believe it is “bona fide”, it is?

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Or perhaps you would just have to say/declare it to be "bone fide", whether you really believe it or not? As long as no one asks any probing questions?

No, I’m subtly suggesting that many firms in Ireland are happy to facilitate a transfer which we wouldn’t touch with a barge pole.

let me give an example

We recently consulted with an Irish client who had been working in the U.K. with a U.K. pension.

We arranged a transfer to Malta and a PCLS but the client was advised to only take 25% which is consistent with the U.K. rules.

If a broker is selling the tax advantages over bona Fide reasons to transfer then I think we are right to be sceptical

Marc said:

One of my first clients early in my career was a Labour MP who didn’t “believe” in the Stockmarket. That didn’t make it any less valid for me to invest in the Stockmarket.

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue.”

Lord Clyde in the case of Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764:

Tax considerations are often a matter of personal choice.

We often talk about “claiming our allowances” and we know that many people fail to do so.

Often that is simply down to a failure to seek timely professional advice. Here the role of the professional and the personal values of an investor need to be aligned.

As professional advisers we are bound to excercise a fiduciary duty to our clients and to always act in their best interest.

In a self-assessment tax system like Ireland the professional adviser provides guidance so that things “sit right” with investors but at the end of the day it is ultimately the taxpayer who signs the declaration.

It is a matter of fact that @time to plan had a U.K. domicile of origin just as my children who were born in the Rotunda and have Irish passports have a U.K. domicile as they take the domicile of their Father.

It is necessary to assess over time if a taxpayer has actively taken steps to give up their Domicile of origin and acquire a domicile of choice. So again professional advice is a necessary condition of a definitive answer.

But leaving all that aside, the O’Sullivan case established that it is not necessary for a taxpayer to move themselves out of Ireland in order to legitimately move one’s pension.

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I suspect there isn’t really a definitive answer on domicile, just a defensible position. As for Lord Clyde, I have heard him quoted many times over the years in the UK by people who now find themselves in very sticky positions over Loan Schemes they participated in as IT contractors. It’s a complex area, but one thing I am certain of is that there is no real certainty or definitive position.

Is it possible to transfer a part of pension pot to Malta or Portugal and keep rest in Ireland. For instance, I have around 200k sitting in occupational pension scheme from previous employment. Can I transfer that fund to a scheme overseas, draw down lump sum after 50, buy apartment and use rest to support my stay there for 2-3 months every year. Meanwhile, I can build up my pension in current scheme that will stay in Ireland.