Pensions
In the near future I am taking up employment with a company in London, which will provide me with a non-contributory pension. To supplement this, I am interested in providing myself with a personal pension that should ideally have the following characteristics:
international mobility, allowing me to make tax-deductible contributions, whether working in an EU state or the US;
flexibility, so that I can make/stop payments to it whenever I choose;
ability to allow some element of self-management of equities directly, such as in US 401K-type plans;
transferability, allowing me to transfer the pension assets at any time to a new fund manager if I believe the first is underperforming.
I understand this may be far beyond the pension industry's grasp, but is any product approaching commercialisation or does any Irish or European legislation address these issues?
Mr R.M., Dublin
I am not an expert in Irish pension provision, to say nothing of the vagaries in other European Union member-states or the US, and without doubt you need to consult an expert. Having said that, there are certain things I am pretty confident about. The first is that you will not be allowed to hold a personal pension plan at the same time as being a member of an occupational pension scheme, contributory or non-contributory. What you would be allowed to do is to pay Additional Voluntary Contributions. These are subject to the permission of your employer - normally forthcoming - and certain restrictions on the total amount paid into pension funding for the purposes of tax relief and also certain maximum provision targeted - basically two-thirds' final salary plus allowances for spouse, inflation and benefits.
It is possible in the Republic to achieve a degree of flexibility with AVCs although buying them outside your employer's pension scheme, if permitted, will almost certainly prove to be more expensive.
As pension fund trustees are able to move between fund managers, I see no reason why the same could not happen for AVCs, although whether you personally can make that decision is less clear, even if the AVCs are standalone.
It is certainly possible to stop and start pension payments within certain plans, although how open-ended such provision is varies from one provider to another. I'm not sure how many would offer the degree of flexibility you desire in this area.
Certainly any scheme which could accommodate the flexibility for which you are aiming will charge heavily for the privilege. It may be there are other ways to secure the flexibility you want.
On the issue of legislation, a Pensions Bill is currently being drawn up with the view to allowing greater flexibility in pension provision, but its precise terms are not yet known. One of the issues being tackled by legislators both here and in the EU as a whole is that of portability of pension provision, one of your concerns.
In your position, I would certainly look for fee-based independent advice on how best to provide for your retirement with the flexibility you require. As you say in your letter, you are in your twenties, so there is plenty of time for contributions to mature into a respectable pension pot.
Capital gains
I am an Irish citizen living abroad for the last 10 years and have officially declared myself nonresident for taxation purposes. I recently purchased shares in a US company through my bank in Ireland. If I decide to cash in these shares at a profit, am I liable for Capital Gains Tax or how will the profits be evaluated?
P.J.K., e-mail
Taxation is generally closely linked to residence. In your case, you say you have officially declared yourself to be nonresident for the purposes of tax in the Republic. In that instance, I do not see how the provision of the Irish capital gains tax code will affect you.
The shares are not held in the Republic as I understand it and the money, if any is earned by way of profit, would not be repatriated here, so any circumstances under which you might have a liability do not occur.
The fact that you have used an Irish bank for the transaction should not make any difference. After all, if you were tax resident in the Republic and used a US bank to fund the share purchase, the capital gain, if any, would come under Irish jurisdiction by way of residence.
All this is not to say you have no tax liability. Your e-mail indicates you work in the Middle East, an area where I am not familiar with the tax code. You would need to check if you have any liability in the state where you are now resident for tax purposes.
Web stocks
I know you published a list of addresses for those Irish stockbrokers which had an Internet presence some time ago. Could you let me know the relevant address for Bloxham Stockbrokers?
Ms E.M., Dublin
The list of stockbrokers doing business in some form over the Internet is growing all the time. However, as of yet, Bloxham has not joined the move to cyberspace. The good news is that the firm tells me it is working on such a site and hopes it will be up and running in the next few months. Quite what services it will offer is not clear at this stage.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, Fleet Street, Dublin 2 or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.
