Tax Liability - Which Country?

A

Andy_F

Guest
I'm a UK national currently living (resident) in Ireland. I have retired from work and have no income arising in Ireland. All income (interest etc) is from UK investments/savings which I pay UK tax on.

Should I be paying tax to the UK revenue or Irish Revenue service.

Best Regards

Andy
 
If you are permanently resident (Domicilled) in Ireland you should be making your tax returns in Ireland. Any income you receive from UK or anywhere else should be declared to the Irish Revenue and any tax paid will be set against your tax liability in Ireland
 
Hi Black Sheep,

Many thanks for your reply.

Best Regards

Andy
 
Black Sheep said:
If you are permanently resident (Domicilled) in Ireland you should be making your tax returns in Ireland.
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Please note that domicile has little, if anything to do with residency, in fact the OP is most likely UK domiciled but resident and ordinarily resident in Ireland.

New legislation in the Finance Bill 2008 allows that UK source investment income may only be taxed in Ireland on the remittance basis i.e. if the income is remitted to Ireland.

If income is chargeable in Ireland, and UK tax is also paid on it, the UK tax will not be 'set against' the Irish tax but rather a credit for some or all of the UK tax paid may be available.

Best to get professional advice.
 
Looks like I will have to seek professional help.

What is the difference between domicile and residency?
 
lightup: Can you clarify your post ie the changes with regard to taxation of UK investment income of an Irish resident but English domiciled person? My understanding is that taxation is unaffected by whether the UK income is remitted or not; and it is taxable in Ireland but should qualify for a tax refund from the UK
 
The 2008 Finance Bill (I think it was s18) introduced provisions to extend the remittance basis of tax to UK investment income and certain employment income with effect from 1 Jan 2008. This extension does not apply to UK source chargeable gains.

This is available to non Irish domiciled individuals who are either resident or ordinarily resident in Ireland and to citizens of Ireland who have not yet become ordinarily resident.

This is due to an EU ruling. The UK are bringing in a similar provision.
 
Domicile is where the person permanently lives, rather than nationality or source of income. If the OP is permanently living in Cork and intends to live their long term, then they are domiciled in Ireland?

What is the difference between domicile and residency?
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Residency is where you spent 183 or more nights in the calender year - this may or may not be your permanent residence e.g. people temporarily working abroad for a year.

Domicile is where you permanently live.

For the vast majority of people have domicile and residency are the same.
 
Domicile is exceedingly complex and I don't believe that there is a 100% definition of it as it's more to do with 'intention' of where you are going to live forever.
 
Bronte said:
Domicile is exceedingly complex and I don't believe that there is a 100% definition of it as it's more to do with 'intention' of where you are going to live forever.
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Agreed. Much more complex than it is practical to go into here. Hence professional advice is recommended.
 
I was in much the same boat and found that Domicile is extremely difficult to change. Basically to change from Uk to Irish domicile, you have to declare the intention to never ever returning to the UK to live, severing all ties. This can even mean having to prove you are going to be buried in Ireland. There are certain tax advantages to being domiciled somewhere other than Ireland as the Revenue should not be interested in any investments you have if they remain overseas. However that does not mean that Hector (Inland Revenue) has no more interest in you.
 
Many thanks for the additional input. I will seek professional advice.

My own understanding from what I have read on the Inland Revenue site is that I would be considered resident in Ireland but domiciled in the UK.

Cheers

Andy
 
Domicile is decided by complicated rules, which are quite different from ‘residence’. Residence is where you currently live. Domicile is your ‘homeland’. Different countries have different rules, but basically if you live more than 6 months in Ireland (or England), you are likely to become a tax resident in that country and have to pay taxes on income arising there. If you are also domiciled in that country, you also have to pay tax on your foreign income as well. However if you are domiciled elsewhere, you only pay tax on foreign income if you ‘remit’ this to the country you live in. Otherwise it is only liable to foreign tax (if any). You can of course remit capital without penalty at any time.

At birth you get your father’s domicile. It would certainly change if you emigrate before 16 years of age and live permanently in your new country. It would change if you move abroad, settle, and marry a native UNLESS either (1) you maintain a Will made under the law of your original domicile (say England) AND make some indication that you may die in England AND retain some connections with England (eg bank account); OR (2) you move to a third country / keep travelling.

In all other circumstances it is difficult but not impossible to acquire a new domicile. Basically, you are stuck with England unless you make a new life in another country, continue to live there as your sole residence, cut all your economic ties with England, AND ESPECIALLY make a Will under the law of your new domicile including a statement that you wished to be buried there.

People who simply retire abroad are very unlikely to change their domicile unless they have ancestral connections with the country they retire to.
 
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