Readers' forum : Pension confusion

My client is an Irish national who has lived long term in the UK. He has an Irish-approved retirement fund from which he receives an annual pension that incurs deduction of tax at source under Irish PAYE rules. Historically we have claimed back the Irish tax deduction under the double tax agreement which states that the pension is taxable in the UK only. However the claim for repayment of the 2016 PAYE deduction has been rejected by the Irish Revenue because it has changed its rules.

It advises that the approved retirement fund is in fact a bare trust but payments of ‘pension’ are taxed as though they are income and therefore double tax relief is restricted to tax that has been deducted from the underlying income.

The underlying income is substantially lower than the ‘pension’ payment each year so the annual payments are being...