Is my UK pension an offshore asset?
Q&A: Dominic Coyle answers your personal finance questions
Revenue’s clampdown is targetting a smallish number of people who over many years have been fairly blatantly gaming the system. Photograph: Gareth Fuller/PA Wire
I have a small UK pension on which I pay UK tax. I was told by the Revenue several years ago that I did not need to pay tax here on my pension as it was already taxed in the UK and came under the double taxation exemption The pension amounts to about €5,000.
As they have not made any contact with me over the years, do I need to make a disclosure? And finally, are Revenue in contact with the English authorities regarding this matter?
Mr P O’H, email
Clearly this clampdown on offshore assets is proving very stressful for a lot of people and, in many cases, unnecessarily so.
Just to clarify, Revenue’s concern is that there are a number of people out there who are Irish resident for tax purposes but who have assets or income stashed abroad which they are not declaring. That last bit is crucial.
The target of Revenue is clearly a smallish number of people who over many years have been fairly blatantly gaming the system, safe in the knowledge that tax authorities in different countries were jealous in protecting their own data and certainly did not proactively share such details. These people are, generally, not your stereotypical criminals but more likely the respectable person next door.
The problem, of course, is that while the number of people deliberately using such devices to evade tax is small, the legislation introduced to stop them will necessarily also gather up many other smaller scale “evaders” who never considered whether their small overseas pension, income or holiday home had tax implications back in Ireland.
But that does not include you. And no, you do not need to notify them.
Most importantly, you have made Revenue aware of your position and the fact that you are paying tax in the UK on this pension, so they have already been notified. From what you say, it sounds like you will have filled out a DT-Individual form at some point. This form goes though both the UK and Irish tax authorities and ensures that your pension is not taxed in both jurisdictions.
Does that mean you will never be contacted by Revenue on this matter? I cannot swear to that. I did deal recently with someone else who had filed a DT-Individual to the UK to say they were tax resident here so that a UK pension was paid tax free to them in the Republic. That did not stop Her Majesty’s Revenue and Customs sending them a letter a year later saying they owed several thousand pounds in UK tax.
As it turns out, the original form had got misplaced between files and no tax was due. So even if you do get some notification, there is no need for concern.
However, I do advise people to keep copies of forms like this for future reference and also to take notes of any phone conversations, as details inevitably fade from the memory with time and that can make proving your position more difficult.
Finally, do the Revenue services here and Britain talk to each other and share information? Yes, they do and that is only going to get more routine, and not just between here and Britain. That is, in large part, why revenue has given warning of this clampdown.
After the May deadline, they’ll be sifting through the data coming from foreign tax authorities relating to people with Irish addresses and seeing who has declared such income and assets – and who has not.
Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to email@example.com. This column is a reader service and is not intended to replace professional advice.