Deposit interest

[confused12]

Hey

If I have a deposit/savings account in Ireland can I earn interest from money sent to this account if I'm not actually living in Ireland? Eg living abroad and sending a certain portion of my salary to this account

 

[murphaph]

Yes and not only that you are not subject to deposit interest tax if you are non resident.

 

[confused12]

Really? That's amazing! I'd imagine it's a common enough practice then?

Is there any charge for transferring the money?

 

[Lightning]

Non-residents are subject to tax in the country that they are resident in.

You need to declare the Irish deposit interest to the tax authorities in your country of domiciliation.

 

[Lightning]

Is there any charge for transferring the money?

Depends on the bank. Frequently EUR to EUR payments inside the Eurozone are free of charge.

 

[confused12]

Non-residents are subject to tax in the country that they are resident in.

You need to declare the Irish deposit interest to the tax authorities in your country of domiciliation.

I see. So when do you become a non-resident? As in, does somebody working in a foreign country for 6 months who is transferring money home qualify as a non-resident?

 

[murphaph]

I see. So when do you become a non-resident? As in, does somebody working in a foreign country for 6 months who is transferring money home qualify as a non-resident?

Have a read of http://www.revenue.ie/en/tax/it/leaflets/res1.html as it can be different for everybody.

 

[confused12]

Have a read of revenue link

Thanks for the link.

Lots of good information there but mostly relevant to income tax, not really relevant to interest on sums transferred from abroad.

 

[confused12]

Non-residents are subject to tax in the country that they are resident in.

You need to declare the Irish deposit interest to the tax authorities in your country of domiciliation.

So as a non resident I would obviously be taxed by the country I'm residing in but I don't understand how this applies to money I send home (after tax) and wish to put in a deposit account

 

[dub_nerd]

So as a non resident I would obviously be taxed by the country I'm residing in but I don't understand how this applies to money I send home (after tax) and wish to put in a deposit account

From a tax point of view "home" is where you are domiciled. If you are domiciled in, say, the UK, then your Irish bank account is a foreign bank account from which you are earning interest. You are entitled to pay no DIRT in Ireland because you are not domiciled there. By the same token, you have to declare and pay tax on this where you are domiciled, i.e. the UK. The fact that the money on deposit is "after tax" is no different from any deposit.

 

[confused12]

From a tax point of view "home" is where you are domiciled. If you are domiciled in, say, the UK, then your Irish bank account is a foreign bank account from which you are earning interest. You are entitled to pay no DIRT in Ireland because you are not domiciled there. By the same token, you have to declare and pay tax on this where you are domiciled, i.e. the UK. The fact that the money on deposit is "after tax" is no different from any deposit.

Thank you for the explanation. So I must declare any money that I transfer back to Ireland? Would the tax I would be paying be similar to the DIRT tax I'm escaping?

 

[oldnick]

Perhaps you know better than we do in which country you are, and what is that country's tax deduction for interest earned abroad.

 

[confused12]

Perhaps you know better than we do in which country you are, and what is that country's tax deduction for interest earned abroad.

This is purely hypothetical as I haven't gone anywhere yet. But yes, I agree it would be best to look at the relevant country's laws

 

[SoylentGreen]

Back in the day when I worked in a Building Society we allowed Irish Residents, living in Ireland, with an Irish address their interest DIRT free if they were sending the INTEREST abroad to a non resident. The interest was leaving the country so it was allowed DIRT free.