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Taxation of pensions in Northern Ireland

When you reach State Pension age you no longer pay National Insurance Contributions, but you don’t automatically stop paying Income Tax.

Source: NI Direct

When you reach State Pension age you no longer pay National Insurance Contributions, but you don’t automatically stop paying Income Tax. If your taxable income – including your State Pension – is more than your tax-free Personal Allowance (which depends on your age), you’re still a taxpayer and must contact HM Revenue and Customs (HMRC) if you’re not already paying tax.

Cross-border issues

How will your pensions be taxed if you retire across the border?

Living South with Northern Pension

Your UK pensions and your State Pension will still be taxable in the UK unless there’s a ‘double taxation agreement’ (covering pensions) with the country where you decide to live. There is such an agreement between the UK and the Republic of Ireland.  As a result your pension will be taxed in your country of residence so once you are resident in the South your income is generally taxable in the South. The tax is usually due to be paid annually in a lump sum.

Please see the following form available for download from the HMRC website – Form IRL-Individualpdf icon. It enables you as a resident of Ireland to apply under the United Kingdom/Ireland Double Taxation Convention for relief at source from UK income tax on a UK state retirement pension or incapacity benefit, and UK-source pensions, purchased annuities, royalties and interest. The form also provides for a claim to repayment of UK tax in cases where payments of the income have already been made with UK tax deducted.

Ifyou get a UK pension for public service e.g. a teacher’s, nurse’s, civil service or forces pension – it will normally remain taxable in the UK, however your pension from that employment will be exempt from UK tax only if you are an Irish national or a dual national of the UK and of Ireland, as well as being resident there.  For more details call HM Revenue and Customs (HMRC)  on+ 44 135 535 9022 if calling from the South, or 0845 300 0627 if calling from the North. or visit the HMRC website – Tax when retiring abroad or back in the UK

The International Pension Centre provides information about pensions and benefits if you live abroad or have lived abroad.  Tel 0191 218 7777 or email: tvp.internationalqueries@thepensionservice.gsi.gov.uk

Living North with Southern Pension

If you receive an Irish pension while you are living in the North it will usually be subject to UK tax rules.

How much tax you’ll pay on overseas income normally depends on whether you’re ‘resident’, ‘ordinarily resident’ or ‘domiciled’ in the UK. For Irish pensions it is generally the case that tax is due on 90% of the value of the Irish Pension. Visit the HMRC website for further information – tax on pensions

Further information on Irish pensions is available on the Citizens Information website – taxation of pensions

Page last checked: February 2016

This webpage is for general information purposes only and while we endeavour to keep it up-to-date, errors may occur.  It is very important that you check with the relevant body to ensure the information is current and is applicable to your situation: – North /  South

If you would like to suggest amendments or highlight new information that could be useful to others please don’t hesitate to get in touch.