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Posted Tue, 16 May 2023 13:16:47 GMT by philip davies
I have an Irish pension built up in a Dublin employers pension fund during 2017-2018 and which is operated by Aviva Ireland. The pension is registered in Ireland and did not benefit from any UK tax allowances. I am now 60 and my ex-employer and Aviva are suggesting I take a lump sum refund of the EMPLOYEE contributions ONLY (the employer contributions have already been removed as i worked in dublin for less than 2 years). Aviva will issue the lump sum to my UK bank account minus 20% Irish lump sum withholding tax. Is the remaining balance I receive in the UK subject to any further UK tax? Do I need to report the lump sum payment and claim the foreign tax credit for the 20% paid in ireland?
Posted Tue, 23 May 2023 13:11:13 GMT by HMRC Admin 32

There is a double taxation agreement between the UK and the Republic of Ireland.  Article 17 advises that pensions and lumpsums arising in Ireland and paid to a resident of the uk, are only taxable in the UK. 

1976 Ireland/UK Income & Capital Gains Tax Convention

This means that you will need to claim back any tax deducted in Ireland on your pension, as it is not taxable there.  You do need to declare this foreign pension / lump sum in a Self Assessment Tax Return.

Thank you.

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