Ireland: Irish Hard Border On Pensions

Last Updated: 1 August 2018
Article by Bethell Codrington

If you are an expat employee in Ireland or an Irish national who has relocated abroad for work or retirement, you may not want to keep your pension in Ireland. Here's why.

In December 2017, Irish Revenue issued two new chapters to their Pensions Manual, which on the face of it did not look draconian, but upon further investigation, the new chapters should leave expats with Irish pension pots asking some key questions.

Typically, when you 'vest' a pension at retirement, you can receive a portion of the fund as cash, and then an income/pension paid for life from the rest.

If a pensioner has emigrated to another country to retire, and that country has a suitable double tax treaty or agreement (DTA) with Ireland, the pensioner can claim treaty relief and have a gross payment at source. He or she will then pay tax in their current country of residence.

All this though seems to have changed with regard to Ireland, unless you are in receipt of benefits direct from a Defined Benefit Occupational Pension. If you have a '"defined contribution/money purchase" plan, things have changed quite dramatically.

Let's look at the detail.

Chapter 23, Approved Retirement Funds

"23.8 Provided the individual has satisfied the specified income or AM RF/annuity requirements (see paragraphs 23.5 and 23.8), the balance of the retirement fund, after any amount taken as a retirement lump sum, may be paid to the individual. This amount is treated as emoluments of the individual and is taxable under Schedule E. The person making the payment (Life Office or Scheme administrator) is deemed to be an employer for all obligations under the TCA 1997.

"23.16. Distributions (including deemed distributions) from ARFs and AMRFs are generally treated and taxed as emoluments under Schedule E, regardless of the residence status of the individual A distribution from ARFs or AMRFs are not payments of pension, PAYE Exclusion Orders are not issued in respect of such distributions."

For the sake of completeness, Revenue also confirms that PAYE Exclusion Orders are not issued where an individual takes the balance of his or her pension fund as a taxable lump sum (see paragraph 23.8).

What is an emolument?

I underline the use of the word 'emolument' in the above chapter for good reason. So, what is an emolument? A search engine defines it as a "profit, salary, or fees from office or employment; compensation for services." Make no mistake that what Irish Revenue is referring to here, is your Irish pension fund balance.

The big question is, why is it being called an emolument? And what are the implications?

Interaction with double taxation agreements

With regard to how distributions to non-resident taxpayers are treated under Ireland's DTAs, other than those DTAs which specifically provide for the taxation of distributions from Approved Retirement Funds (ARFs), while a distribution of income or gains arising from the underlying investments, or of the original capital, is the taxable event in Ireland under domestic legislation, it is not seen as taxable for DTA purposes.

As the ARF owner is the beneficial owner of the ARF capital, and any income and gains arising, he or she should be treated as such for the purposes of applying the various articles of the DTA between Ireland and their country of residence.

So, in order to determine where the taxing rights lie for a distribution from an ARF, the distribution should be broken down between:

  • the underlying income
  • gains or capital which it represents.

The appropriate articles in the DTA should then be applied accordingly at the dates on which the income or gains arose to the ARF. If the individual was a resident of Ireland at those dates, the DTA would not apply. Where a distribution involves the return of all or part of the original capital invested in an ARF, then, unless there is a capital article in the DTA, any Irish tax charge under Part 30 of the TCA 1997 that relates to a capital disbursement is not limited by the DTA.

Chapter 24 Personal Retirement Savings Account (PRSA)

"24.4 An individual who retains the balance of a PRSA (after payment of the tax free retirement lump sum) in the PRSA, rather than use it to purchase an annuity or transfer it into an Approved Retirement Fund (ARF) or AMRF, may then draw down from that balance as and when he/she chooses. Subject to certain exceptions (see below), amounts drawn down from a vested PRSA are treated as emoluments and are subject to tax under Schedule E at the individual's marginal rate. Imputed withdrawals under section 790D (see paragraph 24.9 and Chapter 28) are subject to tax in the same manner as actual withdrawals.

"24.10 Income and assets retained in a vested PRSA are beneficially owned by the PRSA owner. Withdrawals (including deemed withdrawals) from vested PRSAs are treated and taxed as emoluments under Schedule E regardless of the residence status of the individual.

"As with payments from an ARF or an AMRF (see Chapter 23}, withdrawals from vested PRSAs are not payments of pension and Revenue do not issue PAYE exclusion orders. PRSA owners in respect of such withdrawals where the PRSA owner is non-resident in the State."


The treatment of ARF distributions (see Chapter 23.16) has also applied since 22 December 2017 in respect of withdrawals from vested PRSAs.

These two new chapters raise some key questions – and concerns – about how future Irish pension payments to non-resident retirees will be handled under DTAs. Classing them as 'emoluments' appears a quite deliberate move.

If you are an expat employee in Ireland or an Irish national looking to retire abroad, you may not want to 'vest' your pension in Ireland but instead look at alternative solutions, because, leaving your pension behind could be damaging to your wealth.

Talk to us

TMF Group are the cross-border experts when it comes to International Pension solutions for employers and their employees. We provide truly global and customised pension management plans to serve companies and the international community in a variety of the 80+ jurisdictions in which we operate.

Need more information? Contact the Pensions team today.

Find out how our services allow our international clients to maintain focus on what matters most to them.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
3 Oct 2019, Webinar, Rotterdam, Netherlands

To view this Webinar in full click here

24 Oct 2019, Business Breakfast, London, UK

Join TMF Group and ACCA for breakfast and a briefing session dedicated to the latest VAT changes and how they affect the UK.

21 Nov 2019, Conference, Shanghai, China

Retail remains a significant growth opportunity even as GDP slows, but the challenge of recruiting and retaining quality staff must never be underestimated and managing these issues successfully can define the winners and losers. TMF Group’s 2019 Annual Retail Summit in Shanghai brings together industry professionals to share opinions on the key differentiators that can lead to achieving growth targets and maintaining momentum for your retail business in China.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions