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bigduckontax, Accountant
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I am a UK resident aged 56. My wife and I are in the process

Customer Question

I am a UK resident aged 56.
My wife and I are in the process of buying a property in the Republic of Ireland.
We intend to move to Ireland sometime this year, probably after selling our UK residence.
I wish to extract all of my personal pension as cash when the rules change in April.
The Irish tax year runs from January to December and, as I understand it, I would be viewed as resident for tax purposes if I spend 183 days or more in the country.
If we were to move to Ireland from July onwards I would not be tax resident from an Irish point of view.
I was wondering if I would still be liable for UK tax from April to July?
Would I pay UK tax when cashing-in my pension after April?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
Let us deal with the UK taxation situation first. When you leave our shores for good complete a form P85 and send it to your tax office. On receipt HMRC will make you non resident for the tax year after your date of departure and split the leaving year into two portions, one resident and one non resident. Your sale of your UK residence will expose you the capital Gains Tax (CGT) on any gain made, but as it is your sole or main domestic residence then Private Residence Relief (PRR) applies which is a relief at 100%. You do not have to sell before you leave, the last 18 months of ownership are ignored and you are deemed to be in residence even if this is, in fact, not the case. PRR is extended by this period.
I am not licensed to give advice on pensions, but I can tell you from a taxation viewpoint that if you withdraw your pot after April 2015 the sum withdrawn will be taxed at your marginal tax rate. Depending upon the size of the pot you could be in for a whopping tax bill if it pushes you into the 40% or 45% tax brackets and if your income goes over 100K then you will start to loose your personal allowance at a rate of a quid for every two over. You are advised to consult an independent financial adviser who is so licensed before taking this step.
As regards ***** ***** there appears a flaw in your reasoning. I accept that the Irish Tax Year runs with the calendar year, but if you move in July you would be subject to Irish tax in 2015 as you would be resident in Ireland over 183 days. Thus you might be caught by Irish CGT on the sale of your UK house, but all is not lost; you would appear to be saved by the Irish 2014 budget. Here is an extract from Citizens' Advice, the Irish Government's web site:
'The relief from Capital Gains Tax (CGT) (for the first 7 years of ownership) for properties purchased between 7 December 2011 and 31 December 2013 was extended by one year to include properties bought to the end of 2014. Where property purchased in this period is held for seven years the gains accrued in that period will not attract CGT.'
In any event the sale of your sole or main domestic residence does not attract Irish CGT, the rules in the two jurisdictions are effectively the same, so you are probably in the clear there.
There you are, a quick canter through the possibilities you face. I do hope I have drawn your attention to some of the possible pitfalls in your move to Ireland.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3609
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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