Liability for house sold in Switzerland

K

klaus-v

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Hello,
Swiss national here and non-irish domiciled. Moved to Ireland in 2008 and bought an investment property in Switzerland in 2010 while already resident in Ireland.
While still resident in Ireland I sold the house in Switzerland in September this year for roughly 50% more than what I had bought it for in 2010.
In Switzerland (in my canton) such sale attracts very little CGT. I'm not remitting the money into Ireland so should not have any liabilities
on the CGT element of the price increase. Anyway I wonder if I have a liability in Ireland on the forex Swiss - Euro change on my original investment? Since the Swiss franc has been so strong lately, my gain in Euro terms has been about 80% instead of 50%. I read somewhere that Forex income doesn't apply to the remittance basis, but I think this is specific to Forex brokerage accounts where people specifically bet on the currency
fluctuations. I'm I right ? So let's say that the house was bought for 1000 CHF in 2010 and 1000 CHF were 1000€ back then. I sold the house and my original 1000 CHF translated into €€€ is now 1500€ . Do I have a CGT tax liabiliy in Ireland on the 500€ forex gain on my original investment even if not remitted and not converted into €€€?

Thanks
Regards

Klaus
 
Last edited:
You certainly don't have a liablity if you haven't sold your CHF; if you haven't disposed of your CHF you can't have realised a gain.

If you sold the house for CHF and then immediately sold the CHF for EUR, you still wouldn't realise a gain, because the CHF price wouldn't have moved (or wouldn't have moved significantly) in the short time between your aquisition of the CHF (when you sold the house) and your disposal of the CHF (when you bought euros).

If you sell the house for CHF, sit on the CHF for a period and then sell for EUR, and CHF has risen against EUR in that time, then you have made a gain. But the gain is measured on the CHF price movement not from the date you bought the house but from the date you sold it.

And the question you actually asked; are you chargeable to CGT on that gain, even if you don't remit it to Ireland? If you kept your CHF on deposit in a bank in Switzerland (or anywhere outside Ireland) and you keep the EUR similarly deposited outside Ireland, you haven't remitted your gain to Ireland and I don't think you are liable to CGT.

You talk about having read that the remittance basis doesn't apply to forex income, but I think there's a misunderstanding here. The application of the remittance basis doesn't depend on what kind of asset you have disposed of; it depends on where the asset is located. Foreign currency is an asset; if you make a gain on y disposing of foreign currency that is on deposit in an Irish bank, or held in an account with an Irish broker, or whatever, that's chargeable. But if you keep your foreign currency outside Ireland, and are non-domiciled, and don't remit the disposal proceeds to Ireland, I don't think you are liable.
 
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