Split year treatment year of departure

Hi,

Quick query re split year tax treatment in the year of departure. If as an Irish tax resident you leave the country during the tax year to take up employment abroad with no intention of returning the following year (i.e. Non tax resident the following year) do you have to formally apply to Irish revenue for split year year treatment for year of departure or can you just assume revenue will automatically apply it?

You don't need to make an application. Simply file a tax return for the year marking yourself as resident in Ireland and only include the income subject to tax in Ireland.

*Edit: this may be incorrect.*

Thanks, that's the position my accountant is taking, however revenue seem to be adopting the position that you have to formally apply for SYT in the year in question for it to apply, I was informed that if you don't apply within the year I question your only option is to declare foreign employment income and apply for credit under the relevant DTA

Every_blooming said:

revenue seem to be adopting the position that you have to formally apply for SYT in the year in question for it to apply

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That's correct, as it's what the relevant legislation (section 822 TCA 1997 https://www.charteredaccountants.ie/taxsourcetotal/1997/en/act/pub/0039/sec0822.html) says.

The relevant Tax and Duty Manual (34-00-01) sets out the position in plain English as follows:
"In the case of an individual leaving the State, the measure is aimed at those who continue to
be resident for the year of departure. If the Authorised Officer is satisfied that the individual
is leaving the State other than for a temporary purpose, with the intention and in such
circumstances that the individual will not be resident in the State for the following tax year,
SYT may be allowed. This means that the individual is regarded as non-resident from the
date of departure so far as the taxation of employment income is concerned.

Where, exceptionally, an individual, during a year of arrival/departure to/from the State, is
unable to satisfy the Authorised Officer that the split year requirements will be satisfied, the
matter may be reviewed at a later date. If it turns out at that stage that the individual does
satisfy the residence requirements for split year, the relief should be allowed then."

High level info about the requirements for claiming, are set out here: https://www.revenue.ie/en/life-even...year-treatment-in-your-year-of-departure.aspx

Thanks,where in the document does it stipulate you have to apply in the year of departure? As it happens I completely satisfy the residence requirements as in I was non resident the year after I left, I was just delayed in applying for SYT

Every_blooming said:

Thanks,where in the document does it stipulate you have to apply in the year of departure? As it happens I completely satisfy the residence requirements as in I was non resident the year after I left, I was just delayed in applying for SYT

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It's clear from how the section uses the present and future tenses respectively:

"where during a year of assessment (in this section referred to as “the relevant year”)... an individual who is resident in the State satisfies an authorised officer that the individual is leaving the State, other than for a temporary purpose—
(I)with the intention, and
(II)in such circumstances,
that the individual will not be resident in the State for the following year of assessment,
and
the individual would but for this section be resident in the State for the relevant year,
subsection (2) shall apply in relation to the individual."

What is split level treatment?

Bronte said:

What is split level treatment?

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If revenue do not grant split year treatment in year of departure what is the best way to proceed in relation to foreign employment income earned in year of departure? It seems unfair to incur a potentially large tax bill due to an accidental delay in applying for something entitled to

If you've moved to a country that has a double taxation treaty with Ireland, you might find that under the DTA your foreign employment income is taxable only in the new country. Even if the income remains taxable here, you'll be entitled to a credit here, for the tax paid in the foreign country.

Would revenue apply a penalty for a delay in declaring foreign income on their form 11 if it was delayed by a few years due to inadvertent belief that split year was applied?

A decent practitioner could probably argue their way out of it, starting by having an argument about whether Split Year Treatment was / is available in the first place.

I cannot stress enough, the need to get proper professional advice, if you're talking about any material amounts of money.

Every_blooming said:

Would revenue apply a penalty for a delay in declaring foreign income on their form 11 if it was delayed by a few years due to inadvertent belief that split year was applied?

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When we left Ireland I'm not sure how this worked, but we got tax back as we didn't work a full year in Ireland. On your more specific point, not all tax systems are Jan to Dec, and not all have the deadlines that Ireland has. As we moved to a country where language was an issue, I'm sure we were clueless about any deadlines etc. There is no way back then I'd have known to fill out foreign income on an Irish tax form for money earned abroad in the year we left. It never came up in any of our discussions with HR and with one of the big 4. If memory serves me correctly a company called Mercier was involved in the moving abroad work. No mention of anything about Ireland and foreign income. Even worse was Irish HR had no clue on PRSI when they made the calculation for my husband on comparing salary and country until I pointed out they had their sums wrong. (I was a lot better at stuff then that I no longer need to know now)

Glad to hear you had no issues, it seems from my situation that if your story ever came to light with revenue and depending on the officer you might incur a tax liability

There should be a campaign to remove this stupid bureaucratic requirement which smacks more of a country trying to deter migration than the opposite.