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Expats in Ireland | Expat Pensions
If you live in Ireland, have a UK pension, QROPS or have been advised to take out an Investment Bond or wish to receive high quality investment advice taking into account Double Tax Treaties, then we are able to assist you.
For many expats living in Ireland the key issues or concerns are summarised by us, with some pointers as to how you can avoid the mistakes that we commonly see, and consider the things that make a difference to every Irish expat.
We regularly blog on the latest matters affecting you, and within these pages we have put together Irish specific pension information for expats. We also focus on the main tax considerations for expats in Ireland and then go onto to discuss specific investment strategies including the pro’s and con’s of investment bonds.
There were 298,000 UK-born people with residency in Ireland in 2016, according to the Irish statistics agency Eurostat, which used figures reported by Irish authorities. Of these, around one-eighth of them receive the UK state pension.
For expats that need advice on pensions and investments, the investment regulator is here https://www.centralbank.ie/
Aisa Group is registered for both insurance and investment advice for expats resident in Ireland.
Ireland Specific Pension Information
All pensions originating from the UK are subject to tax in Ireland unless they are pensions being paid in respect of service to the government (eg civil service) or local government (but not teaching). These exceptions are taxed in the UK instead.
KEY POINT: Pensions - UK pensions can be paid without deduction of UK tax if you are resident in Ireland and don't spend too many days a year in the UK.
Ireland only recognises investments, investment providers and insurance bonds that are registered to be sold in Ireland. There is a suggestion that the sale of non-compliant insurance bonds (whether outside a pension or not) will not enjoy any tax benefits and should be declared on tax returns, but certainly non-regulated investments do not come under any form of protection.
The legal and tax consequences of a foreign trust are complex and uncertain. Case law is scarce. For an expat living in Ireland, or returning to the UK they have to consider personalised bond rules to avoid taxation in the UK, and they have to consider any trust implications in Ireland.
KEY POINT: For those expats who were advised to take out a trust in the UK and put the investment into an Investment Bond for tax efficiency reasons – you must review this arrangement through a combined UK and Irish wealth adviser who has Inheritance Tax specialities (such as ourselves), especially if the expat intends to return to the UK.
There is a saying ‘Don’t let the tax tail wag the investment dog’. Investors should be interested in the best strategy to get the highest net return after tax AND fees.
KEY POINT: If the fees for a tax strategy are higher than the tax saved, then it would be sensible to look at taxed options with lower fees. In some cases clients would have been better off not taking out the supposedly “tax-efficient” investment bond!
The adviser should look at alternative strategies, suggest options to discuss with you, finalising a best solution for you, the client, based on investment, fees and the overall tax liability. Non-regulated investments do not come under any form of protection.
KEY POINT: Investments not regulated under EU rules will not be protected under the Financial Services Compensation Scheme. If these investments go bust then the client will lose all their money and have no protection.
Key issues / concerns
Investments not regulated under EU rules will not be protected under the Financial Services Compensation Scheme. If these investments go bust then the client will lose all their money and have no protection.
Some Irish investment bonds will be helpful but we recommend only with EU regulated investments inside and ideally a “clean” structure (no commissions if possible although declared commissions are legal in Ireland). Investment bonds, when sold in a QROPS or International SIPP, are to be avoided.
The main consideration should be the balancing of tax efficient advice which takes into account future plans, and charges of products.
If the fees for a tax strategy are higher than the tax saved, then it would be sensible to look at taxed options with lower fees.
The vast majority of expat advisers (differ from regulated Irish advisers), providing investment or pension investment advice to UK expats, do not have investment licences and are circumventing this by selling insurance wrappers that are expensive and commission laden.
What should you be considering
If you are confident enough, then do your research, and place investment directly.
If you need assistance, then seek advisers who are regulated themselves in the UK for pensions advice, and / or regulated for INVESTMENT advice in Ireland.
Consider not only tax efficiency, but also costs!
Point 4 – is, make sure the costs are accurate! If you are told the costs are 1% or 1.5% per annum in total and there is no fee up front, then you are probably being lied to in 95% of cases.
Some advisers, providing investment or pension investment advice, do not have investment licences and are circumventing this by selling insurance wrappers (investment bonds) that are expensive and commission laden.
Don’t get taken in by the great claims over QROPS and Insurance bonds or investment platforms that are really investment bonds. These add layered charges and are usually not the best outcome for clients (although we accept that in around 15% of cases they are).
Don’t be a sheep. Just because your best friend was advised to do something, never assume this is the right thing. Each person is an individual and requires individual solutions. If your friend were to walk off a cliff, would you follow them?
European Economic Area regulation: Aisa Direct, a U.K. limited corporation, is authorised and regulated by the FCA – Reg.189652, for provision of intermediary services through the EEA under both the IMD and MiFID, including a branch called Aisa International.
Trading Names: TailorMade is a registered trading name, but does not provide expat pension advice in that name. This website is aimed at individuals not resident in the UK or USA. Please see www.aisagroup.org in order to ensure that you are dealing with the most appropriate group company.
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TailorMade aim to challenge the status quo by optimising returns through transparency and intelligent investing, allowing our satisfied clients’ to enjoy a comfortable journey to their investment goals. Comfortable because we ensure that investment risk is aligned with clients’ aspirations. We know that if you are satisfied with the risk strategy on your investment, then it allows you to spend more time on other things in your life.
We deliver greater returns by giving you the best options of SIPP’s, QROPS or pensions to consider. We ensure you minimise potential death taxes and relaxed, knowing we will not use investment bonds purely because it pays commission as we offer transparent fees on all of the options available to you.