Client Profile:

Meet David.

Like many British retirees in Portugal, David believed his Irish pension income would be tax-free under the pre-2020 Non-Habitual Residence (NHR) regime — or so he thought, says Joanne Leach, International Cross-Border Adviser.

The Surprise

When David tried to access his pension, he was shocked to learn that his Irish Occupational Pension, PRB etc. — vested into a PRSA/ARF — was still taxable in Ireland.

Unlike his British friends who accessed their UK pensions tax-free, David now faced unexpected Irish taxation — and the risk of being taxed twice.

“Many expats think their Irish pension is safe from local tax once they move abroad — but Schedule E rules often catch them off guard. With no PAYE exclusion and no tax credit abroad, double taxation becomes a real risk.”

– Bethell Codrington, Director, TMF International Pensions

The Problem: Schedule E Taxation

Under Irish tax rules, once a pension is vested into an ARF or PRSA, withdrawals are taxed as emoluments under Schedule E, similar to employment income. This creates several challenges:

• Ireland retains taxing rights, even if you're no longer Irish tax resident

• No PAYE exclusion order is available for non-residents

• The foreign tax authority (e.g. Portugal) may not view this income as ‘pension income’

As a result, David risked being taxed both in Ireland and Portugal — despite doing everything “by the book.”

The Solution: An International Pension Transfer

We advised David to transfer his Irish PRSA into a regulated overseas pension scheme, recognised under EU and double tax agreements (DTA) frameworks.

The outcome?

• No Irish tax on pension drawdowns

• Portuguese tax applied correctly under NHR rules

• Immediate access to funds

• Avoided the 4%–6% ‘deemed distribution trap

Now, David enjoys retirement in Portugal — drawing income on his own terms, with peace of mind and proper tax treatment.

Worried your Irish pension might not be as tax-efficient as you thought?

David’s case is far from unusual — and taking action before vesting could save you a significant tax bill.

It’s not just those moving to Portugal. If you or your client is planning their retirement to France, Spain, Monaco — or elsewhere in Europe, if you hold an Irish PRSA or ARF, you could face unexpected double taxation.

This case study is intended to highlight how effective planning can prevent costly tax surprises. If you’re moving to Portugal or elsewhere in the EU, our team can help you review your Irish pension options.

Contact MiraClair Wealth’s international pension specialist to explore your situation and get tailored advice.

As always, we recommend seeking personalised financial and tax advice before taking any action.

Special thanks to Bethell Codrington for his expert contribution.

Important Information

The information on this page is for general guidance only and does not constitute personal financial, tax, or investment advice. Tax treatment depends on individual circumstances and may change in the future. Cross-border planning should always be reviewed with a qualified professional who understands both UK and the regulations of the country in which you are tax resident.

If you are considering making any changes to your pension or investments, we strongly recommend seeking personalised advice.