Retiring Outside of Ireland with an Irish Pension

In 2018, research by Expatistan ranked Ireland as the country with the 7th highest cost of living in the world. It is for this reason that retirees that are under-funded – or even generously funded – seek out a lower cost of living by moving abroad.

However, before moving abroad and drawing an income, it is important to determine whether you will still be tax resident in Ireland. Irrespective of where you have accumulated your pension, it will be taxed according to your residency. You are resident in Ireland for tax purposes if you are in Ireland for a total of 183 days or more in a tax year, or 280 days or more in a tax year plus the previous tax year taken together, with a minimum of 30 days in each year. If either of these scenarios applies to you, your worldwide income will be taxed in Ireland.

Even if these scenarios do not apply to you, however, any Irish income that you may have such as from a state pension or rent from property will be taxed in Ireland.

As a retirement destination, Europe has always been popular with Irish expats able to access local public health systems in the European Union. Portugal has become a notable hot spot for retirees due to their ‘Non-Habitual Residents Regime’. This allows you to pay no tax on foreign sources of income for the first 10 years.

However, for those that have looked further afield and are not able to utilise a scheme like the one in Portugal, there are fortunately still options available.

Pension schemes such as SIPPS (Self-Invested Personal Pension Schemes) and QROPS (Qualifying Recognised Overseas Pension Schemes) allow you to take control of your money. With a personal pension, you can gather all your fund into one pot and choose the types of investments that you put your money into.

In 2018, research by Expatistan ranked Ireland as the country with the 7th highest cost of living in the world. It is for this reason that retirees that are under-funded – or even generously funded – seek out a lower cost of living by moving abroad.

However, before moving abroad and drawing an income, it is important to determine whether you will still be tax resident in Ireland. Irrespective of where you have accumulated your pension, it will be taxed according to your residency. You are resident in Ireland for tax purposes if you are in Ireland for a total of 183 days or more in a tax year, or 280 days or more in a tax year plus the previous tax year taken together, with a minimum of 30 days in each year. If either of these scenarios applies to you, your worldwide income will be taxed in Ireland.

Even if these scenarios do not apply to you, however, any Irish income that you may have such as from a state pension or rent from property will be taxed in Ireland.

As a retirement destination, Europe has always been popular with Irish expats able to access local public health systems in the European Union. Portugal has become a notable hot spot for retirees due to their ‘Non-Habitual Residents Regime’. This allows you to pay no tax on foreign sources of income for the first 10 years.

However, for those that have looked further afield and are not able to utilise a scheme like the one in Portugal, there are fortunately still options available.

Pension schemes such as SIPPS (Self-Invested Personal Pension Schemes) and QROPS (Qualifying Recognised Overseas Pension Schemes) allow you to take control of your money. With a personal pension, you can gather all your fund into one pot and choose the types of investments that you put your money into.

More information on these can be found here; or book a free consultation with one of our qualified advisors.

To learn more, book a free consultation with one of our qualified advisors using the form on the left.

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