5 Taxation Considerations When Moving to Ireland

By John McNicholas

Published on: September 26, 2020

Tax Planning

With Brexit coming over the hill, a significant number of UK companies are seeking to relocate part of their operations to Ireland in order to retain easy access to the EU markets. With that, we’re seeing quite a jump in enquiries from workers in the UK who are considering a move themselves to Ireland.

There’s a lot to think about. Apart from the exciting opportunities (and upheaval) for family, career and life in general when moving to a new country, you also need to carefully weigh up the financial impacts too.

There are lots of mistakes and potential missed opportunities to be made… We’ve identified five areas that need careful consideration from a tax viewpoint, before you make the move to Ireland. These are not an exhaustive list.

1. Income tax

While Ireland is undoubtedly a fantastic place to live, and I say that having moved here myself in 2008, income tax in Ireland is at a rate of up to 55% (tax year 2020) on certain forms of earned income. Have you factored this into your financial calculations? Maybe that alternative role in Paris makes more sense from a purely tax-based standpoint?

2. Regular saving

If you or your family are likely to receive financial gifts from non-resident relatives, offshore savings plans can offer a more tax efficient means of saving in comparison to Irish unit linked savings plans, which themselves are relatively poor value.

3. Your investment portfolio

This one is quite a minefield, with plenty of expensive mistakes to be made. Where you are domiciled, the actual location and type of assets that you hold and also your future location intentions all can have quite a significant impact on the tax treatment of your investments. Tread very carefully… by that we mean, get very good advice.

4. Pensions are not completely straightforward

The default thinking may be to simply stop paying into your old pension scheme and start afresh when you come to Ireland. But what do you do with your assets in the old scheme? Do you leave them where they are or transfer them into your new scheme? These decisions cannot be made solely on ease and value alone, as there are implications around your pension lifetime allowances too. And these implications can present some attractive opportunities… Alongside this, careful consideration needs to be given to your state pension in your country of origin. For example, even having left the UK, you can continue pay voluntary national insurance contributions in the UK to top up your UK State Pension, and also qualify for an Irish contributory State Pension. Again, get advice from someone who knows their way around the pension systems in both Ireland the UK.

5. Passing money to heirs

This is another complex area, where expensive mistakes are made. There are different inheritance tax systems, rates and thresholds and different countries, all of which need to be navigated very carefully. Expert planning is needed to mitigate tax as much as possible.

We’ve only covered the tip of the iceberg above, nothing will beat sitting down with someone who is fully versed in this space. We are fortunate at Global Wealth to have deep experience in helping people manage their move to Ireland. After all, our Managing Director Marc Westlake made that very move himself in 2008 when he moved to Ireland from the UK.