We do hope you all survived tax deadline in one piece? John and I are very pleased to share a little good news with you in our latest blog.
In recent years a withdrawal of lump sums from retirement overseas pension plans was a controversial topic, when dealing with taxpayers coming to Ireland.
A common assumption was that the same €200,000 or 25% of the fund value could be taken tax-free as for an Irish scheme.
Revenue had issued a precedent in the 90’s which allowed this treatment for EU member state schemes qualifying as a QUIROPS. Many taxpayers applied the same treatment for non-EU schemes.
Revenue deem a precedent to have a valid life of five years unless brought into legislation. This had not happened. Therefore, the Revenue position was that these payments were fully taxable in Ireland. Taxpayers who became Irish residents without seeking advance advice were faced with an unexpected liability.
There were exemptions where a payment related to a past employment; but payments from a personally held fund were not in this category (similar to an ARF).
The Good News
S 15 Finance Act 2023 has amended this position and hence the happy news:
For payments made from 1/1/2023 the exemption will apply to lump sums from overseas schemes.
This will assist people retiring to Ireland or longer-term Irish residents who may have deferred overseas pension entitlements.
Good news indeed!
We hope you find this information useful. Please reach out if you have any queries regarding this blog, or indeed, if you require any tax advice.