Impact of foreign secondment on TRS and stamp duty?

I bought a house in late November 07 as a first time buyer, so didn't have to pay stamp duty and am claiming TRS.

In January 08 I took up a secondment in another European country which has a reciprocal tax agreement with Ireland, as part of which I'm provided with an apartment as part of my package (I haven't rented out my house and am staying there whenever I'm back in Ireland). I'm still tax-resident in Ireland for 08 on the two-year reckoning, since I spent all of 07 in Ireland. However, I'm now looking at extending my secondment into 09 which would probably put me over the max number of nights spent outside the country for tax purposes in 09.

While the PAYE and tax returns aspect is being picked up by my employer, my query is on stamp duty and TRS. If I am deemed not to be tax-resident in Ireland in 09, will this have an impact on either of these? Will I lose my entitlement to TRS and, even if I don't rent out my house, is there any risk of stamp duty clawback?

I will also contact Revenue and see if my employer can provide any advise, but was wondering if anyone here could shed any light? Apologies if this is not the correct area in which to post this query.

Will you be out of Ireland for all of 2009? If you were to come back before the end of 2009 and spend at least 30 days here in 2009, with the intention of spending at least the requisite number of days (273 I think) in 2010, then you could claim tax residency here for 2009 as well

I stand to be corrected but are you saying that he would be resident here for 2009 under the 280 day rule if he spent at least 30 days here in 2009?

If that is your argument I would have to beg to differ as the effect of the 280 day rule is to treat an individual as tax resident in Ireland for the latter of a pair of years where (between both years) the individual spends at least 280 days or more in Ireland over both years with at least 30 days presence in Ireland in each of the 2 years. This, as a concept does not have a bearing on the Stamp Duty as there is no minimum number of days test in the legislation.

Instead there is a two legged test (occupation and rent test) covering 5 years from the date of execution of the converyance regarding the property or, if earlier, when the property is sold. If you don't occupy the property for the 5 years or if shorter for the period you own it or you receive rent within 5 years or while you own it (if you sell it inside the 5 years) then my reading of the legislation is that you would suffer a clawback of the stamp Duty relieved. Basically if you fail to occupy for the 5 years or for the period you own it or you receive rent (if you were occupying) then you are exposed to suffering a clawback.

The relevant legislation is Section 92A Stamp Duties Consolidation Act 1999 as amended up to Finance Act 2007.

On the interest, you get TRS for a mortgage on what is your "sole or main residence" where the property is located in Ireland NI or GB (Section 244 Taxes Consolidation Act 1997. There is no definition of the phrase "sole or main residence" in the legislation and so it's plain or ordinary meaning should be taken. Essentially from a lay perspective I would be applying a majority of time test (i.e. is it your sole or main residence for most of the year?) Personally if it's going to be held by you as your main residence for when you are in Ireland and for when you return permanently you would probably be ok to continue claiming the TRS but note it is not beyond doubt. As with any piece of law it could be a toss up if you had to appeal a withdrawal of the interest relief. Ultimately it's your decision on whether or not to de-register for TRS.

Perhaps you should speak face to face with a registered tax advisor given that it is tax law (not accounting) that is at issue.

Persius said:

Will you be out of Ireland for all of 2009? If you were to come back before the end of 2009 and spend at least 30 days here in 2009, with the intention of spending at least the requisite number of days (273 I think) in 2010, then you could claim tax residency here for 2009 as well

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Mark_Mc said:

I stand to be corrected but are you saying that he would be resident here for 2009 under the 280 day rule if he spent at least 30 days here in 2009?

If that is your argument I would have to beg to differ as the effect of the 280 day rule is to treat an individual as tax resident in Ireland for the latter of a pair of years where (between both years) the individual spends at least 280 days or more in Ireland over both years with at least 30 days presence in Ireland in each of the 2 years...

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My understanding is that it can also apply to the former of a pair of years. I.e. at least 30 days in 2009 followed by at least 250 days in 2010.

Now obviously he can't know for definite until after 2010 is elapsed whether he meets the criteria, but I would think that if he returns before the end of 2009 and plans to stay here in 2010 he could declare himself tax resident for 2009. I believe there is a provision in the legislation for declaring yourself resident in these type of circumstances.

Of course, this is only my understanding. The OP should look for proffessional advice if he were intending to make use of this provision.

If I am deemed not to be tax-resident in Ireland in 09, will this have an impact on either of these?

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If you are deemed not resident in Ireland, then the property will be regarded as an investment property. The important question is whether or not you are deemed not resident.

You need to take professional advice as there are a number of factors interacting which make it difficult determine your exact status i.e. amount of time away in each tax year, whether or not the secondment was voluntary or forced, whether or not there is anyone else staying in the property when you are away etc.

Below is the wording in the Act dealing with the 280 day rule. To be resident in 2009 on the 280 day rule then the pair of years to be used is 2008 and 2009 not 2009 and 2010.

For the purposes of the Acts, an individual shall be resident in the State for a year of assessment [2010] if the individual is present in the State-

(a) ...

(b) at any one time or several times-

(i) in the year of assessment [the latter year being 2010], and
(ii) in the preceding year of assessment [2009],
f
or a period (being a period comprising in the aggregate the number of days on which the individual is present in the State in the year of assessment and the number of days on which the individual was present in the State in the preceding year of assessment) in the aggregate amounting to 280 days or more.

Persius said:

My understanding is that it can also apply to the former of a pair of years. I.e. at least 30 days in 2009 followed by at least 250 days in 2010.

Now obviously he can't know for definite until after 2010 is elapsed whether he meets the criteria, but I would think that if he returns before the end of 2009 and plans to stay here in 2010 he could declare himself tax resident for 2009. I believe there is a provision in the legislation for declaring yourself resident in these type of circumstances.

Of course, this is only my understanding. The OP should look for proffessional advice if he were intending to make use of this provision.

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Thanks all - apologies for not responding sooner but have been offline. My understanding is similar to Mark_Mc's in that it is not the former of a pair of years.

However, my employer is putting me in touch with a professional tax advisor to get a definitive answer, so hopefully should be able to resolve this with them.

Thanks again for your responses.