New query about cashing in a UK ISA in Ireland

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Stitcher

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Hi,
I am Irish, living and working here again, but I took out a share based ISA for £5,500 as savings when I worked in England 10 years ago. I am now thinking of cashing in some of it. I am a PAYE worker and as far as I know revenue does not know about it. I reckon I will have to pay tax on any profit element it has acrued but what sort of tax will I have to pay and how will that be deducted? Any help gratefully appreciated.
Thanks
Stitcher
(I had put this query in another post about ISAs but thought it was better to start a new thread)
 
I imagine you'll have to pay the same tax as you would if it was an unwrapped Irish investment. This means capital gains tax on any increase in the share values. Theoretically, you should probably have been paying tax on the dividends paid within the ISA over the years as well.

My reasoning for thinking this is that the double taxation agreement between the UK and Ireland normally means that you need to calculate your Irish tax due but can offset UK tax paid. Within the ISA, no UK tax will have been due which leads me to believe that you must pay the entire Irish liability.

This reasoning is why I'm considering liquidating my ISA BEFORE moving back to Ireland.


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Revenue in Ireland do not recognise an ISA and therefore understanding the underlying investment instrument is very important.

A cash ISA is subject to DIRT rates of tax.

A fund based ISA would be subject to exit tax

An insurance based ISA would be subject to exit tax

An Isa investing directly into securities would be taxable to income tax on dividends and capital gains tax on gains.

A UK National tax resident in Ireland who intends to return to the Uk should consider retaining their ISA if they can switch the underying instruments within their existing provider to benefit from their non domiciled status. If they can't then often the best course of action would be to close the ISA and optimise their investments for Irish tax (depending on the intended length of stay in Ireland)

For Irish Nationals returning to Ireland retaining an ISA makes no sense and will result in unpaid tax and should be closed on return to Ireland.

I specialise in advising on cross border issues as I am qualified in both jurisdictions.
 
Thanks Marc, that info helps.
Should have closed it before coming back!! What is exit tax? My ISA is a fund based one and I don't get dividends. It is worth about £4,000 more than I put in.
Thanks
 
Exit tax this year is at a rate of 36% however this goes up to a rate of 41% next year and an effective rate of 45% if you are under 66 years of age and have sufficient investment income.
 
Bumping an old thread here. I presume a fund based ISA would be subject to the deemed tax every 8 years. Does anyone have an opinion whether that clock starts from the date of acquisition of the ISA or the date it came within the Irish system.

For example UK resident, Irish domicile invests in ISA. 4 years later he moves to Ireland. Would the deemed tax happen 4 or 8 years later?
 
wonko said:
Bumping an old thread here. I presume a fund based ISA would be subject to the deemed tax every 8 years. Does anyone have an opinion whether that clock starts from the date of acquisition of the ISA or the date it came within the Irish system.

For example UK resident, Irish domicile invests in ISA. 4 years later he moves to Ireland. Would the deemed tax happen 4 or 8 years later?
Click to expand...

Hi Wonko, did you ever get an answer to this? I'm in the same position and wondering how my ISA would be taxed in Ireland. I have a fund with Vanguard UK.
 
Vanguard in the UK operate an OEIC structure which is a UCITS and hence exit tax will apply. Sell your ISAS before moving to Ireland and invest appropriately for Irish Tax
 
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