Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

149. To ask the Minister for Finance the action which will be taken to recoup the pension tax relief given to the €73 million transferred overseas (details supplied); the anti-avoidance measures which can be put in place to stop this happening; and if he will make a statement on the matter. [37114/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The transfer of the deferred benefits of a member of an occupational pension scheme or a Personal Retirement Savings Account (PRSA) contributor's PRSA fund to an overseas pension arrangement is permitted, subject to the transfer complying with the Occupational Pension Schemes and Personal Retirement Savings Accounts (Overseas Transfer Payments) Regulations, 2003 and Revenue requirements. The Regulations are under the remit of the Minister for Social Protection and prescribe the conditions for transfers to arrangements established outside the State.

I am informed by the Revenue that many transfers of pension benefits overseas are made for legitimate reasons and are fully compliant with the transfer Regulations and Revenue requirements. The issue of seeking to recoup the tax relief provided to such individuals in building up their pension benefits here does not, therefore, arise.

Since 2012, all overseas pension transfer requests must be accompanied by a declaration signed by the individual concerned to the effect that the transfer is for bona fide reasons and conforms to all of the relevant transfer obligations. As I mentioned recently in my response to Deputy McGrath's Parliamentary Question No. 77 of 24 November 2016, since 2014 Revenue has been involved in an ongoing  compliance program in relation to the transfer of pension funds off-shore with the objective of seeking to ensure the legitimacy of such transfers. I also mentioned in that reply that seeking to move pension funds or PRSAs overseas in an effort to circumvent the requirements of Irish tax legislation may fall foul of the conditions under which they were approved by Revenue and that this could result in the withdrawal of approval, the effect of which would be the claw back of the tax relief previously given. I also made reference to the fact that, to date, no withdrawal of approval has taken place.

Finally, my Department has been engaged in a review of the whole area of pension transfers abroad in conjunction with Revenue, the Department of Social Protection and the Pensions Authority with a view to establishing what additional safeguards may be required in this area. This review is not yet completed. However, I am conscious of the need to ensure that any amendments to the existing arrangements do not impede or interfere with legitimate overseas transfers that allow individuals leaving the State permanently to simplify their tax affairs by taking their pensions savings with them, so that they can continue to save to provide an income in retirement.