Should I inform revenue in writing that I'm non-resident

A

alwaysonit

Registered User
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I've been non-resident for a few years now and am thinking of investing in ETFs soon.
Should I inform Revenue in writing that I'm a non-resident so that they won't try to change me CGT?

Also, I assume if I ever become resident again I should realise my profit before I return (ie sell them, then buy again when my residency status has changed)?

And this leads to wondering about the example where an Irish resident can have shares that have appreciated well, leave long enough to become non tax resident and sell them without paying CGT?
 
alwaysonit said:
Should I inform Revenue in writing that I'm a non-resident so that they won't try to change me CGT?
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It is not something you decide, it is something determine based on the facts and in conjunction with the tax authorities of any other states who are claiming you to be tax resident in their jurisdiction.
 
Anybody have anything to add about the example where an Irish resident can have shares that have appreciated well, leave long enough to become non tax resident and sell them without paying CGT?
 
So, when you're non resident in Ireland, are you earning money? Where does the money originate from? Is it a salary? Where did the ETF's investment money come from? On another post you say you have €500k to invest and you have an income of aprox €40k. Maybe you get an inheritance from a trust that pays your tax? Lots of unknowns in your posts that might be explained and get you a better answer. Above might come across as being a bit personal, it's not meant that way.
 
That's going a bit off topic, I'd like to get the answers of the original post in this thread.
I'll set up another one debating where I'm resident of.
 
alwaysonit said:
Anybody have anything to add about the example where an Irish resident can have shares that have appreciated well, leave long enough to become non tax resident and sell them without paying CGT?
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Yes, but they had to show residency somewhere else instead for 3 years before the disposal.

If I recall correctly, the tax, or a large portion of it was deducted at source and they had to prove the residency.
It can't be Marvin Gaye-esque: Wherever I Lay My Hat (That's My Home)

The country chosen was done so on the basis of the Double taxation agreement in place at the time.
 
Whatever you might think, Revenue will make up its own mind about your residence status.

This will involve not just the absence of your physical presence in Ireland under domestic tax legislation, but it will also apply Double Taxation Treaty residence tests.

Treaties contain a series of tests, which are applied in a specific order to determine the country of residence. If one residency test fails in all countries, the next is applied and so on.

One of these tests is typically - the country of which you are a citizen.
 
I did some research on double taxation treaty residence tests.

In Ireland all I could find was the number of days I’ve spent in the country (the two year test – which I fail).

In UK, it’s permanent home – centre of vital interests – habitual abode - nationality. If Ireland had the same "tie breaker" rules I would be Irish resident. Does anyone know where I can find these? Which brings the question back up, should I contact revenue, explain my situation and find out if they class me as resident or not.


If I am classed as an Irish resident, I of course will be unhappy and want to get residency in a country that does not charge CGT. Is there anywhere that gives a blueprint of the easiest way to become resident in one of these?
 
 
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The point of DTAs is not to impose a liability to tax, but to prevent double taxation. A DTA cannot impose a taxation or a liability where domestic legislation doesn't provide for it.

If you're not resident here and not taxable here under the domestic code, a DTA cannot make you resident.
 
alwaysonit said:
If I am classed as an Irish resident, I of course will be unhappy and want to get residency in a country that does not charge CGT. Is there anywhere that gives a blueprint of the easiest way to become resident in one of these?
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Well Switzerland does not impose CGT on the gains from investing provided you make less than about 10 trades per month. It does impose a wealth tax, but assuming your total assets is not much above 500K it will not be very much, as that is on the very low end of the scale.

To establish residency, you need to obtain a residents permit.
 
The Irish residency test is a fairly straightforward day counting exercise. However, if possible, it would make it cleaner for you if you could establish a tax residency country so that no-one else tries to claim you (and your taxes). Do a search for low-tax/no-tax residency/tax havens - there are quite a few options but there's plenty of info on each if you look. Some are quite expensive to establish or require significant assets - I'm not sure that avoiding income tax on 40K pa and CGT on gains on a 500K asset would justify the costs involved - but no harm in looking to see if there's somewhere easy/cheap to establish in.

I presume you know the difference between the CGT treatment of residents, ordinary residents and domiciled individuals? You will be liable to CGT on worldwide gains until you cease to be ordinarily resident (after three full years of being non-resident - so usually 4 years out). You will remain liable (forever) to CGT on what Revenue refer to a specified assets (broadly Irish land, property, minreal rights, exploration rights - or shares mainly backed by any of these; or business assets used in the State) - see Revenue's CGT1 pdf for full info.
 
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