Revenue Steps up Overseas Investigations

O

OverseasCafe

Guest
There's a very interesting piece by Ian Kehoe on the front of the Sunday Business Post today (March 16th) about the revenue stepping up its investigations into property owned by Irish citizens overseas. It claims that it has received the names of thousands of Irish citizens (directly from the agents as far as we're aware but this isn't stated in the piece). It says it is predominantly targetting Spain and France at the moment but there is no doubt that this will be spread out to cover all the usual suspects such as Portugal, Hungary, Bulgaria, etc. before too long.

In light of the recent rise in co-operation between countries, particularly those in the EU - with relation to taxation, banking and asset ownership - the question at this stage is not whether the Revenue will find out about undeclared money invested in overseas property, it's merely a question of when. If you've got a property overseas and haven't declared it, or more importantly the money with which it was purchased, now might be a good time to bite the bullet and make a voluntary declaration. You'll be treated far more favourably and save yourself all the extra taxes and penalties you'll incur between here and the time your purchase is investigated.

The piece isn't yet available on the Business Post's website but when it does appear later we'll attach the link.
 
The article can be found at [broken link removed]
but it will move to the archive at the end of the week.
 
I'm just wondering, do you work for the Irish revenue?
 
The Sunday Business Post have reported this story, and variations thereon, many times previously, iirc mostly on bank holiday weekends.
 
leghorn said:
I'm just wondering, do you work for the Irish revenue?
Click to expand...

Yes, were the overseas property website wing of the revenue.

Seriously, we've been in the overseas property industry for long enough to have seen what the revenue can do when they get their hooks into someone who has not declared an overseas purchase. It's not pretty. It is far more approachable if you make a voluntary declaration. Either way it's no skin off our noses, just passing on the advice for what it is worth.
 
ecstatic said:
where do u declare it which form?
Click to expand...

Ecstatic,

We're not sure that there is a specific form, it is merely a declaration to the Revenue for the origin of the funds associated with the purchase overseas, any income which may have arisen from it (less allowable expenses) and any capital gain made on its disposal (again less expenses). It is no different to making a disclosure on undeclared funds in Ireland.

It is usually best done by your accountant, even though the Revenue are bound by law to be completely above board in such situations, but you'll need to have the rest of your affairs in order and it is always good to have someone with a bit of knowledge batting on your behalf. You'll need someone who can show what tax, if any, you've paid abroad.

Mind you if it is undeclared in Ireland it is probably undeclared abroad as well so you may want to get that sorted first. As yet there is no compunction on the Revenue to tell the overseas country that an Irish citizen owns a property there and may own that tax in that jurisdiction. If you don't tell them, however, you run the risk of paying the full amount of tax to the revenue here and then having the country in which you own/owned the property come back on you for extra taxes at a later stage. You also don't want to pay more than you should and any decent accountant should be able to make sure you have availed of any allowances you are entitled to.

If you don't have an accountant it is probably worth your while getting one but if you don't wish to, tell your local revenue office that you want to make a Voluntary Declaration of Disclosure which will get the ball rolling.
 
ubiquitous said:
The Sunday Business Post have reported this story, and variations thereon, many times previously, iirc mostly on bank holiday weekends.
Click to expand...

If this is indeed the case we apologise, but we've never seen any of the previous incarnations and thought it was a new story, hence the post.
 
Nah, this story is very old indeed (which is not to say there's nothing in it.)

OverseasCafe, who are "we", by the way?
 
extopia said:
Nah, this story is very old indeed (which is not to say there's nothing in it.)

OverseasCafe, who are "we", by the way?
Click to expand...

Apologies for the 'oldness' of our 'news' then. Although I think the French part of the story must be new, we've never heard of the Revenue being active there before. They've been in Spain for a while now.

We are OverseasCafe of course. It was all explained in a previous post, too much and too late to post it all again, search and ye shall find.
 
OverseasCafe said:
Seriously, we've been in the overseas property industry for long enough to have seen what the revenue can do when they get their hooks into someone who has not declared an overseas purchase.
Click to expand...

How exactly is one supposed to "declare" an overseas purchase?
 
Re declaring an overseas property - those that have used their savings ( or got a mortgage) to buy a holiday home and use it just as a holiday home and don't sell it probably don't have to declare anything as there is no tax due nor any legal obligation to declare it as far as I know. Those that let it out obviously have to declare and pay income tax on the rental income - probably in the country the house is in which will be offset angainst any Irish tax due as long as their is a double taxation agreement. Those that sell the property at a profit are liable for Capital Gains Tax. Those that bought with 'hot' money (untaxed income) may get into trouble if revenue find them and they have to explain where they got the money to purchase the property.
 
extopia said:
How exactly is one supposed to "declare" an overseas purchase?
Click to expand...

Sorry, that was mis-written, as an Irish tax payer you are obliged to declare profit made from any investment overseas, property or otherwise. There is no need to declare an 'overseas purchase' per-se, but you are obliged by Irish law to inform the revenue when you open a bank account overseas. This leads to the obvious question as to why the account was opened in the first place.
 
OverseasCafe said:
There is no need to declare an 'overseas purchase' per-se, but you are obliged by Irish law to inform the revenue when you open a bank account overseas.
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I wasn't aware of this. I opened a bank account in Portugal last August when I bought an apartment there.

I didn't let the apartment last year, but am hoping to do so this year. (I've recently put it on a holiday homes website.)

Is there a particular form I am required to complete and submit to Revenue?

Regards
Homer
 

From the Overseas section of the [broken link removed]:

"Are there any tax implications when I buy a foreign property?

You are not required to notify Revenue if you buy a foreign property. However, in most cases you will have to open a bank account in the country where you purchase the property, and you must notify Revenue of this on a tax return in the year the account is opened (see [broken link removed]). You must ensure that the money used to purchase the property has been or will be fully declared for tax purposes and that all due taxes have been paid whatever the source of the money. If you have borrowed money to buy the property, the money used to repay this loan must also be declared.


You must comply with your normal tax obligations. Using monies to buy a foreign property does not remove these obligations. Revenue will be interested in confirming that funds used have been declared for tax purposes or are not liable to tax."
 
Thanks

I presume it's OK to do this when I'm completing my tax return for 2007, or should I notify them immediately?

Regards
Homer
 
Homer said:
Thanks

I presume it's OK to do this when I'm completing my tax return for 2007, or should I notify them immediately?

Regards
Homer
Click to expand...

The account wasn't opened in 2007 so filing it with your 2007 return is fine.
 
OverseasCafe said:
The account wasn't opened in 2007 so filing it with your 2007 return is fine.
Click to expand...

Thanks for responding so quickly.

Actually, it was opened in August 2007. I'd prefer to stay compliant, so please let me know if I'm overdue on making a disclosure.

Thanks
Homer

PS: I had a look at your website - very interesting.
 
You're supposed to declare foreign accounts in the tax return for the year in which the account was opened. In your case, that would be with your 2007 tax return, which is due in October 2008 (November if you use ROS to file your return).

Be sure to check any tax advice received from property agents, BBS posters (or any other non tax professional) with your accountant.
 
I used an Irish company www.ptireturns.com to sort my Spanish tax return and I was very surprised to learn at the time that despite the property not being rented (2 bed apartment in Alicante) I was liable for a Deemed Rental Income tax return in addition to a wealth tax return!
Despite receiving no income form the property the Spanish tax man wants a cut!
No connection to above company.
 
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