Pension Transfer from UK to Ireland

A Qualifying Recognised Overseas Pension Scheme (QROPS) is a pension product registered with HMRC in the UK that can accept pension transfers from the UK  to Ireland without triggering a tax charge.

You can transfer most private sector pensions, but most public sector pensions cannot be transferred. To find out if your specific pension can be transferred, contact us.

The key benefits include:

• Convenience of having your pension in euros if retiring in Ireland
• No tax charge on the transfer when using a QROPS
• Simplified inheritance planning if your beneficiaries aren’t in the UK
• Access to Index funds in Ireland

There’s a 25% overseas transfer charge unless you’re transferring to your country of residence (Ireland). However, if you move outside Ireland within five complete UK tax years of the transfer, you’ll need to pay this 25% charge to HMRC.

If you’ve been UK tax resident anytime within the last 10 UK tax years, you may be liable to UK tax on your QROPS at retirement. Additionally, payments from your QROPS within five years of the transfer will be subject to UK tax rules, regardless of where you live.

For a QROPS Buy Out Bond, the earliest age is 55 (increasing to 57 from 6 April 2028), provided you’ve been non-UK resident for 10 complete UK tax years. For a QROPS PRSA, it’s age 60, or 55 if you’re fully retired from all Irish employments.

Your UK pension will typically be paid in sterling and needs to be converted to euros. Currency exchange rates can affect the final amount, and there will be currency conversion charges applied by the QROPS provider’s bank.

The process is complex and may take a number of months

The seven-step process involves: discussing with a financial adviser, requesting transfer forms from your UK provider, completing the QROPS member information form, submitting documents, processing the transfer, currency conversion, and selecting investment options.

Both QROPS products offer over 50 unit-linked funds and self-directed options such as deposits (demand and fixed term) and execution-only stockbroking.

In Ireland, you can take 25% as a tax-free lump sum (subject to limits), but all foreign pension lump sums paid after 1 January 2023 count towards the €200,000 maximum tax-free limit in Ireland.

The policy value is payable to your estate, with beneficiaries subject to inheritance tax. This applies to both QROPS products.

If you choose an Approved Retirement Fund (ARF) or Vested PRSA, you must withdraw a certain percentage annually: 4% if aged 60+, 5% if aged 70+, or 6% if you have combined assets of €2 million or more and are aged 60+.

The QROPS Synergy products are single payment contracts that only accept UK pension transfer proceeds. If you want to make additional contributions for Irish employments, you’d need a separate PRSA policy.