Transferring Your UK Pension to Ireland

A Qualified Recognised Overseas Pension Scheme (QROPS) is a pension plan that is officially registered with HMRC in the UK. It is designed to receive pension transfers from the UK without incurring potential tax charges.

Here are several reasons why you might consider transferring your UK pension to Ireland:

• Greater Control – Gain more control over how your pension is managed.
• Inheritance Planning – Moving your pension to Ireland may simplify estate planning.
• Enhanced Benefits – A different provider could offer more favorable pension benefits.
• Lower Fees – Switching providers may help reduce high pension management fees.
• Returning to Ireland – If you’ve worked abroad, you may prefer to bring your pension home.
• Plan Closure – Your current pension scheme may be closing, requiring a transfer.
• Relocation Abroad – Moving to another country may necessitate aligning your pension with the local system.

Pension Transfer Options for Irish Residents

Most Irish residents under 70 can transfer their pensions, though some conditions apply. If you’ve worked in the UK during your career, you likely have a pension there. If you’re planning to move back to Ireland or have already done so, you can transfer your UK pension to Ireland using a Qualified Recognised Overseas Pension Scheme (QROPS) Buy Out Bond. This gives you more control over your pension investments both during your working years and retirement.

Our mobile app MyPension can assist with the QROPS transfer to bring your UK pension to Ireland. Transferring your pension to Ireland is often advantageous, as it simplifies management by having your pension in your home country and in your local currency. Additionally, managing your pension abroad can lead to complications, particularly in areas like inheritance planning.

Important: If the scheme you’re considering for your transfer isn’t a QROPS, your UK pension provider might reject the transfer, or you could face at least a 40% tax charge.

What is QROPS?

A Qualified Recognised Overseas Pension Scheme (QROPS) is a pension plan that is eligible to receive a transfer of UK pension benefits without incurring a tax charge. QROPS provides an excellent solution for Irish nationals who have contributed to a UK pension and wish to transfer it back to Ireland. It’s also beneficial for UK nationals concerned about the potential impact of Brexit on their pensions, as it offers protection against the increasingly restrictive UK pension regulations.

Benefits of QROPS

• Greater Control – Enjoy more flexibility in managing your pension investments.
• Tax Efficiency – A QROPS can receive pension transfers from the UK without triggering a potential tax charge.
• Convenience – If you plan to retire in Ireland, managing your pension locally is simpler. Keeping your pension in the UK requires submitting an annual tax return in Ireland to declare UK-based income. Transferring your pension to Ireland allows you to work with a financial advisor familiar with the local market.
• Inheritance Planning – If your beneficiaries or dependents are outside the UK, transferring your pension to Ireland simplifies inheritance matters.
• Standard Fund Threshold (SFT) Benefits – Pension savings transferred to an Irish QROPS do not count toward the €2 million SFT, which is the maximum pension amount you can save in Ireland before incurring significant tax charges. The SFT only applies to pension savings earned in Ireland.

To explore your QROPS transfer options, consult one of our financial advisors today. They can provide expert guidance to help you make an informed decision about securing your retirement funds.

. To find out if you should transfer your plans, speak with one of our Financial Advisors, today.

• Choose a Registered QROPS – Ensure your pension transfer goes to a scheme registered with HMRC as a Qualifying Recognised Overseas Pension Scheme (QROPS) to avoid potential UK tax charges of up to 55%.
• Minimum Retirement Age – The earliest age you can access benefits under a QROPS is 55, except in cases of ill health.
• Tax Residency Matters – If you’ve been a UK resident within the past 5 to 10 tax years, you may still be liable for UK tax on your QROPS when you retire.
• Accessing QROPS Benefits – You can withdraw funds if you are aged 55 or over and have not been a UK tax resident for at least 10 tax years.
• Overseas Transfer Charge (OTC) – A 25% tax charge applies to QROPS transfers unless:
  • The transfer is to your employer’s occupational pension scheme.
  • The transfer is to a scheme in your country of residence.
  • The transfer is within the European Economic Area (EEA).
• Pension Savings Limits – Both the UK and Ireland have pension savings limits:
  • UK Lifetime Allowance (LTA) (abolished in April 2023, but previous tax rules may still apply).
  • Ireland’s Standard Fund Threshold (SFT) – Currently €2 million, with tax implications for exceeding this limit.

How Does QROPS Affect My Tax-Free Lump Sum?

• The tax-free lump sum you withdraw from your QROPS counts towards your lifetime tax-free allowance in Ireland.
• In Ireland, the first €200,000 of lump sum withdrawals is tax-free.
• The next €300,000 is taxed at the standard rate (currently 20%).
• If your total pension fund at retirement exceeds €800,000 (including UK and Irish pensions), any lump sum over €200,000 is taxed in Ireland at 20%, whereas it may be tax-free in the UK.

Why Consider a QROPS Transfer?

By transferring your UK pension to a QROPS, you gain:
✔ Greater flexibility over your retirement funds.
✔ More control over investment choices.
✔ Potential tax advantages, particularly if retiring in Ireland.

Step 1: Sign-up to MyPension

1. Sign-up to MyPension
2. Add a pension via the MyPension dashboard: When you add your UK pension and sign the transfer of agency document, you will automatically be assigned a Financial Advisor who will arrange a meeting to discuss your pension transfer options.
3. Contact Your UK Provider: Reach out to your UK pension provider to request a transfer options form.
4. Include Overseas Transfer Option: Ensure that the form includes the option to transfer your pension overseas.

Following these steps will help you initiate the process of transferring your UK pension to Ireland using a QROPS, providing you with greater control and potential tax benefits for your retirement savings.

To determine whether pension transfer is right for you, speak with one of our Financial Advisors, today.

The duration of a QROPS transfer largely depends on the information provided and your individual circumstances.

• If you have already contacted your UK pension provider and requested transfer options, including overseas transfers, the process typically takes 2–3 months from the initial consultation with a financial advisor to the transfer’s completion.
• However, certain factors may impact the timeline, including:
  • Your duration of time spent in the UK
  • Your tax residency status
  • Processing times of both UK and Irish pension providers

What Are the Costs of a QROPS Transfer?

• A QROPS transfer from the UK to Ireland is tax-free, provided specific conditions are met.
• However, a 25% Overseas Transfer Charge (OTC) applies unless the transfer is made to:
  • Your employer’s occupational pension scheme
  • Your country of residence (Ireland, in this case)
  • A pension scheme within the European Economic Area (EEA)

To ensure a smooth and tax-efficient transfer, consult a financial advisor to guide you through the process.