I was very interested in the response to a recent question about the tax position on a British pension. I worked in the health services in England for many years and returned to work in Ireland a few years ago. I turned 60 recently and received my first payment from the health-service pension which had been frozen. At the time, I went to my local tax office to ask about the tax position and was assured it would be taxed in England, which it is. In your reply you said if the pensioner was an Irish citizen, they were liable for Irish, not English tax. As this seems contrary to the tax office advice, I am anxious to find out which is correct.

Mr P.McG., Galway

The most complicated of all positions is that in respect of British government or local authority pensions in respect of work of a governmental nature carried out in Britain but being paid to someone now resident in Ireland. Having checked again, this time with the Revenue Commissioners, I am assured that such pensions are ordinarily taxed in Britain. This ruling would seem to cover a case such as yours where the pension is from the British Department of Health in respect of National Health Service employment. That is contingent on such NHS employment being seen as work of a governmental nature.

However, this is complicated by nationality. If you are an Irish national and do not also hold British nationality, such a pension paid out of public funds for work of a governmental nature would be chargeable to tax in the Republic. If you are a British national, or hold dual Irish and British nationality, the pension is chargeable to tax in full in Britain.

My wife and I are British citizens resident, and in my case working, in the Republic since 1960. We have been in receipt of British state pensions since 1985. At all times, these have been taxed here. From your reply, it would appear that this is incorrect.

I also receive, since 1985, an occupational pension from previous employment in the UK.

Both are taxed in the UK and the tax allowed against Republic of Ireland tax. If the British state pension is not taxable here, then clearly the British tax on it will not be allowable here.

In addition can you tell me how far back one can go when claiming a refund of overpaid tax in previous years?

Mr J.T.H., Co Wicklow

If I can begin at the end. One can go back 10 years when claiming refunds in respect of overpaid tax in previous years. When you are looking at tax paid over a longer period than this, it is important that you act swiftly to ensure that you do not lose out on any refund you might be entitled to in relation to 1988/89.

Going back to the question of British state pensions, the confusion arises in the distinction between British pensions paid out of public funds for work of a governmental nature (as dealt with in the question above) and the ordinary British state pensions - old age pensions, widow/ers pensions etc - which, of course, are also paid out of public funds.

The latter are liable to tax in the country of residence, regardless of nationality and, therefore, in your case, would be liable to tax in the Republic.

If these have been taxed in Britain, it would logically be allowable against any tax liability in this jurisdiction.

On the subject of your occupational pension, the Revenue's position is that as long as it is not paid out of public funds - i.e. for work of a governmental nature as in the case above - the full amount is chargeable to tax in the Republic as long as you are a resident here, again regardless of nationality. It is not chargeable in Britain.

Finally, you mention that the tax paid in Britain is collected by deduction from the occupational pension and ask how it should be treated and whether it should be regarded as being paid in proportion to the gross amount of each pension.

I am sorry to say that I can get no clear reading on this and would suggest that you talk to an accountant specialising in the area of tax liabilities under Anglo-Irish accords, a sensible move in any case apart from the most simple tax returns.

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