Revenue Commissioners are examining the transfer of Irish pension funds offshore to ensure this has been done for legitimate reasons and not to evade tax.

In response to a parliamentary question from Fianna Fáil Finance Spokesperson Michael McGrath, Minister for Finance Michael Noonan said Revenue has been engaged in a compliance programme since 2014, which is ongoing.

He said this “involves visits to pension providers, pension administrators and pension trustees in relation to the transfer of pension funds off-shore”.

Since 2012, 565 notifications to transfer pension arrangements off-shore have been received by Revenue, covering funds valued at more than €73m.

Revenue confirmed that moving pension funds offshore in an effort to circumvent pension tax law “may fall foul of the conditions under which a pension scheme was approved by Revenue as an exempt approved scheme”.

At present, pension tax legislation does not provide for penalties for non-compliance in this area.

The only sanction available is the withdrawal of the approval of the pension scheme as an exempt approved scheme or the withdrawal of the approval of the Personal Retirement Savings Account (PRSA) product.

This would mean a claw back of tax relief previously given, however, no such sanction has yet been implemented.

Commenting on Revenue’s examination, Michael McGrath said: "Anyone considering transferring pension funds offshore in an effort to get around the requirements of Irish pension tax legislation needs to be made aware of the very serious financial consequences they may face.”

He added: “While the number of such transfers notified to Revenue is significant, we do not know how many such transfers have been made without the knowledge of Revenue.

“If the Revenue identify transfers of pensions offshore that are not done for bona fide purposes, they need to use the powers they have to withdraw the approval of the scheme.

“I also believe it is time for the Oireachtas to consider introducing specific penalties for non-compliance with the law in this area."