CGT ( Resident, Non-Dom )
- Thread starter Kinsella
- Start date
You do not have to pay CGT on foreign income (including profits subject to CGT ?) that is outside Ireland and the UK, as long as the proceeds are not remitted to Ireland.
Otherwise you pay tax as normal.
www.revenue.ie
Otherwise you pay tax as normal.
What is domicile and the domicile levy?
This page provides an overview of domicile status
www.revenue.ie
AAAContributor
Registered User
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In broad terms.....
An Irish tax resident non-domiciled individual is liable to Irish CGT on Irish capital gains and foreign capital gains remitted to Ireland.
Realise a gain on the sale of an Irish property? CGT is due.
Realise a gain on the sale of a foreign property? No Irish CGT due unless the gain is remitted to Ireland.
Sources:
The main charge to CGT based on residence is set out in Section 29(2) Taxes Consolidation Act (TCA) (i.e. CGT is due on any worldwide gains) but this does not apply to a non-dom, who comes under a separate basis of charge in Section 29(4) TCA:
What qualifies as an 'Irish gain'? Refer to Section 533 TCA:
An Irish tax resident non-domiciled individual is liable to Irish CGT on Irish capital gains and foreign capital gains remitted to Ireland.
Realise a gain on the sale of an Irish property? CGT is due.
Realise a gain on the sale of a foreign property? No Irish CGT due unless the gain is remitted to Ireland.
Sources:
The main charge to CGT based on residence is set out in Section 29(2) Taxes Consolidation Act (TCA) (i.e. CGT is due on any worldwide gains) but this does not apply to a non-dom, who comes under a separate basis of charge in Section 29(4) TCA:
Taxes Consolidation Act, 1997, Section 29
The electronic Irish Statute Book (eISB) comprises the Acts of the Oireachtas (Parliament), Statutory Instruments, Legislation Directory, Constitution and a limited number of pre-1922 Acts.
www.irishstatutebook.ie
What qualifies as an 'Irish gain'? Refer to Section 533 TCA:
Taxes Consolidation Act, 1997, Section 533
The electronic Irish Statute Book (eISB) comprises the Acts of the Oireachtas (Parliament), Statutory Instruments, Legislation Directory, Constitution and a limited number of pre-1922 Acts.
www.irishstatutebook.ie
Thanks to cremeegg and AAContributor for comments and links.
The reason for my question relates to my purchase of UK equities from realised UK dividends. None of these monies were brought into Ireland. Accountant deems CGT liability on exchange rate differential between the timing of realisation and the subsequent purchase.
The reason for my question relates to my purchase of UK equities from realised UK dividends. None of these monies were brought into Ireland. Accountant deems CGT liability on exchange rate differential between the timing of realisation and the subsequent purchase.
AAAContributor
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That's correct.
Foreign currency is an asset for CGT purposes - Section 532 TCA.
The location of this asset is deemed to be where the creditor is resident (i.e. Ireland in this case) - Section 533 TCA.
Gains on foreign currency bank accounts do not qualify for the remittance basis of taxation even if located outside Ireland.
I presume your accountant has allowed for the personal exemption against any gains:-
Gordon Gekko
Registered User
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On what basis do such gains not qualify for the remittance basis?That's correct.
Foreign currency is an asset for CGT purposes - Section 532 TCA.
The location of this asset is deemed to be where the creditor is resident (i.e. Ireland in this case) - Section 533 TCA.
Gains on foreign currency bank accounts do not qualify for the remittance basis of taxation even if located outside Ireland.
I presume your accountant has allowed for the personal exemption against any gains:-
UK income is also considered to be Foreign income
The rules were changed in 2008 to allow the remittance basis for UK income
Section 18 FA 2008 – UK source income
Up to 1 January 2008, the remittance basis of assessment did not, by virtue of section 73 TCA 1997, apply in respect of income arising from UK source securities and possessions.
By virtue of section 18 of Finance Act 2008, section 73 TCA 1997 ceased to have effect so that, with effect from 1 January 2008, the remittance basis may apply to UK source income arising on or after that date to individuals who are non-domiciled in the State. However, this is subject to Paragraph 3.1 in respect of foreign employment income chargeable to tax under Schedule E.
Note - Under the provisions of section 29(4) TCA 1997, prior to its amendment by section 42 of Finance (No.2) Act 2008, the remittance basis of assessment did not apply in respect of UK source chargeable gains. By virtue of the amendment made by section 42 of Finance (No.2) Act 2008, the remittance basis of assessment applies to chargeable gains arising in the UK from disposals made on or after 20 November 2008.
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AAAContributor gave you that — by TCA s. 533(c) a bank deposit is an asset located where the depositor is resident — in this case, Ireland. It doesn't matter where the bank is located.
Normally that doesn't give rise to a CGT issue, since bank deposits don't normally generate gains. But if you have a foreign currency account there can be gains (or losses) which are generated when you uplift funds out of the account. You don't qualify for the remittance basis on an FX gain because, as an Irish resident, all your FX deposits are Irish assets, so these are gains on the disposal of Irish assets.
(S. 533(c) applies to all debts, not just bank accounts. So even if your foreign currency isn't being held in a bank, if it's being held by some person or institution for you, that gives rise to a debtor-creditor relationship, and s. 533(c) will apply. I think the only way to avoid it would be to keep your foreign currency in a shoebox under a bed outside the state, basically.)