UK Pension tax liability- Retired Irish tax resident

F

frankbrett

New Member
Messages
5
Hi, I'm looking for advice on an issue and didn't receive great clarity from speaking to HMRC and Irish Revenue.

My father is a retired Irish resident and receives a UK state pension as his only source of income. His pension proceeds of £14k exceeds the free allowance of £11k so he has received a tax bill of £250 which presumably will be a recurring issue annually. As an Irish tax resident my understanding is that he is not liable for UK tax and his pension is treated as overseas income by Irish Revenue.

From my calls, it seems the advice given by HMRC is to complete a double taxation exemption form to claim a refund on UK tax, while on the Irish side, to register for self assessment, declare the UK Pension proceeds as overseas income. Should then be able to generate a Statement of Liability for 2023 that can be furnished to HMRC to confirm the income is taxed (or not) in Ireland. As an over 65 married tax unit I believe the income would be below any taxable threshold.


Does anyone have any experience working through this process that can advise on the correct steps to follow?
 
Sounds odd. He's resident in Ireland? HMRC have the correct address? Is the pension paid into an Irish bank account? Should only be taxable in Ireland as far as I can see. Also don't understand how the figure of £250 was arrived at.
 
Lisgoold said:
Sounds odd. He's resident in Ireland? HMRC have the correct address? Is the pension paid into an Irish bank account? Should only be taxable in Ireland as far as I can see. Also don't understand how the figure of £250 was arrived at.
Click to expand...
Yes HMRC wrote to him in Ireland. The £250 odd is the standard rate of income tax on the differential between the annual pension payment (13k) and the tax free allowance threshold (11.5k). However I should be able to get a refund on this if I can satisfy HMRC that he is Irish tax resident. Which seemingly requires logging a self assessment for Irish tax year 2023. As far as I'm aware, this UK income isn't sufficient to generate an Irish tax liability as an over 65 has an allowance of €18k.
 
The tax position depends on the source of employment that gave rise to the pension - public service or private employer
 
In this case it was a private employer. So I believe HMRC were correct to apply the tax. However the issue is that the recipient is no longer tax resident in the UK
 
No, private UK pensions are not taxable in the UK if the recipient resides in Ireland

You need to send the document demanded by HMRC so that the pension is paid without any UK tax deducted

You can probably reclaim any tax deducted in previous years

You will gave to file a tax return in Ireland, but if that is the only source of income, then it will be tax free
 
Thanks I expected that was the case. As far as I'm aware, this is the first year they have tried to charge him tax. I'll set up the Irish tax return and send on the statement of liability to HMRC
 
Yes, it's a UK Welfare pension, but it was earned from a private employer not a State employer eg teacher, policeman, public servant

The rules are that pensions earned by a public employment are taxable in the state where they were earned, pensions earned by private employment are taxable in the state where the recipient resides
 
jpd said:
Yes, it's a UK Welfare pension, but it was earned from a private employer not a State employer eg teacher, policeman, public servant

The rules are that pensions earned by a public employment are taxable in the state where they were earned, pensions earned by private employment are taxable in the state where the recipient resides
Click to expand...


@jpd

Thanks for your contributions.

I hope you don't mind me asking you further questions.

Person aged 61 living in Ireland, retired from HSE job, receiving Irish PS occupational pension, but also receiving small occupational pension from the NHS in the UK.

Let's say the pension is 5-6k GBP, and so is untaxed by the UK, as well below the tax-free allowance in the UK.



I am reading this Reveune webpage:

Tax-exempt pensions

This page provides an overview of tax relief for pension contributions and how pensions are taxed
www.revenue.ie www.revenue.ie

Tax-exempt pensions​

The following pensions are exempt from tax:

  • Foreign occupational and social security pensions that would not be taxable if the recipient lived in the country that granted the pension.



This seems to imply that the 5k GBP pension is tax exempt in Ireland?

I had presumed that it should be added to Irish income, and taxed accordingly, but on further reading of your posts, I'm not so sure.

It's hardly tax-exempt? Could that be true?

Thanks.
 
Protocol said:
@jpd

Thanks for your contributions.

I hope you don't mind me asking you further questions.

Person aged 61 living in Ireland, retired from HSE job, receiving Irish PS occupational pension, but also receiving small occupational pension from the NHS in the UK.

Let's say the pension is 5-6k GBP, and so is untaxed by the UK, as well below the tax-free allowance in the UK.



I am reading this Reveune webpage:

Tax-exempt pensions

This page provides an overview of tax relief for pension contributions and how pensions are taxed
www.revenue.ie www.revenue.ie

Tax-exempt pensions​

The following pensions are exempt from tax:

  • Foreign occupational and social security pensions that would not be taxable if the recipient lived in the country that granted the pension.



This seems to imply that the 5k GBP pension is tax exempt in Ireland?

I had presumed that it should be added to Irish income, and taxed accordingly, but on further reading of your posts, I'm not so sure.

It's hardly tax-exempt? Could that be true?

Thanks.
Click to expand...
Surely though, that £5k pension would be taxable if it was being claimed in the UK. Whether or not tax was paid on it, would depend on total income, and tax code. Whether or not tax was paid on it, it's still taxable income.
 
Protocol said:
I am reading this Reveune webpage:

Tax-exempt pensions

This page provides an overview of tax relief for pension contributions and how pensions are taxed
www.revenue.ie www.revenue.ie

Tax-exempt pensions​

The following pensions are exempt from tax:

  • Foreign occupational and social security pensions that would not be taxable if the recipient lived in the country that granted the pension.
Click to expand...

The above is probably referring to something like a Roth IRA discussed here:

Irish Taxation of American Roth IRA Distributions

Can anyone here confirm for certain that Irish tax residents are not subject to Irish income tax on American Roth IRA distributions? It’s not easy to find dispositive information online. Roth IRAs are not explicitly mentioned in the Double Taxation Treaty between Ireland and the USA, presumably...
www.askaboutmoney.com
 
The pension from the NHS is taxable only in the UK and is not not taxable in Ireland

It was earned by working in a public service position and so is taxable in the country where the employment took place
 
jpd said:
The pension from the NHS is taxable only in the UK and is not not taxable in Ireland

It was earned by working in a public service position and so is taxable in the country where the employment took place
Click to expand...
If true, I've never heard of this before. Would the position be the same if the countries were reversed?
 
Sorry for more questions, @jpd.

If somebody has, say 5k GBP pension from the NHS, untaxed in UK, as low income, do they simply never mention it to Revenue?

Or do they provide Revenue with the details, and Revenue won't tax it?

I'm surprised that this pension income is, effectively, untaxed anywhere.
 
I have an NHS pension, a UK state pension, and a UK private pension, all three of which have been included in my total annual income and taxed in Ireland for the past decade.There was some HMRC form I signed years ago which excluded these from UK tax - I don't recall the details but it was relatively straightforward. UK tax was never required to be paid on any of these.

There was some mention at the time that my having dual nationality helped, but I've never heard of this since, so I've no idea if it's true.
 
You must log in or register to reply here.
Back
Top