Consolidate your funds
One way in which clients can take this same approach to their pensions is by consolidating all of their funds into one overall pension pot. This enables the disparate funds to be allocated towards the same goal and overall investment strategy can be realigned with where the client finds themselves now. It also serves to simplify things greatly and allows the individual to align with currencies other than those of the initial offerings. This is a service I am delighted to be able to offer now to clients from Ireland, or indeed for anyone who has paid into an Irish pension scheme.
Reduce your tax liability
Transferring Irish pensions to a consolidated scheme also enables Irish expats to take advice from an independent financial adviser in the country where they live. This can be invaluable. Having multiple sources of pension income at retirement can have implications on the amount of tax you pay, and where. If your pensions are based in Ireland and you are resident elsewhere, you could end up being taxed at source in Ireland at a higher rate than you might be in your country of domicile. This will depend largely upon the double tax agreement (DTA) that the two countries may or may not have, and is where consolidating your pensions can be so powerful in reducing your tax liability – although it should be mentioned that individuals must have a bona fide reason for doing so, such as retiring overseas.
Greater flexibility
Irish Approved Retirement Funds (ARFs) are an option if you are not resident in Ireland, but these can come with some amount of complexity and expense – indeed many Irish providers are unable to offer ARFs to non-Irish residents at all, leaving an individual with the only remaining option which is to buy an annuity. A consolidated scheme will offer you greater flexibility in how you receive your pension payments.
Seek advice
To truly make the best of your pension investments, it’s always worth taking financial advice from a regulated local advisor who really understands the domestic market. By moving your pension to another jurisdiction that is more favourable and has DTA with your country of residence and by having a local advisor, it enables you to begin a professional relationship with an advisor who can guide you through the intricacies of the country’s tax laws, and make sure you are getting the best returns possible. It will open up avenues of investment to you that might have otherwise remained out of reach with your funds locked into an Irish scheme. Further to this, if there are still funds left after death, these can be transferred directly to beneficiaries without incurring Irish Capital Acquisition Tax (unless of course the beneficiaries live in Ireland).
I’m really excited to be able to offer this new service to Irish expats living in Portugal. With a dedicated senior group of Irish nationals at the helm, clients can take great confidence in knowing that their money is being managed by a highly efficient and regulated financial team. This product is developed and tailored to meet the demands of Irish expats worldwide, and to allow the greatest flexibility in managing your money for your retirement. It’s made to measure.
The above does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity.
Blacktower Financial Management has been providing expert, localised, wealth management advice in Portugal for the last 20 years. We can help with specialist, independent advice on securing your financial future. Get in touch with us on +351 289 355 685 or email us at info@blacktowerfm.com.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
It appears there is good news on the horizon for up to 2 million pension savers. The UK Financial Conduct Authority (FCA) is looking at evidence that some major providers applied exit charges to people’s pensions without informing them. In some cases, this amounted to nearly 40% of the value of the fund.