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Double Taxation?

  • 06-11-2010 4:01am
    #1
    Creole
    Closed Accounts Posts: 12 ✭


    Good morning all,

    I have a query re. double taxation - ie I am self-employed in the UK at present, but will be in Ireland for 6-9 months next year. Whilst in Ireland I hope to be self-employed. If that works out, will I have to pay tax both in Ireland, and the UK? Or is there some kind of agreement on that? I hope so! I have school aged children but they wont be in Ireland with me as they need to continue school, so will remain in UK with my family members. Although I will pop back to the UK for a week or 2, each month.

    I do claim working family tax credit and child tax credit in the UK. Will this be an issue in terms of being abroad for 6-9 months, bearing in mind I will be in the UK for a week or so during every month? Sorry if its a complicated question but I just cant seem to get a clear or straight answer from the powers that be. What worries me is, they dont seem to really know and I dont want to hit any problems re. this in Ireland. I have a mind I will get a more sensible answer on this board. So if anyone has any advice..please do tell, thanks.


Comments

  • #2
    nompere
    Registered Users, Registered Users 2 Posts: 1,678 ✭✭✭nompere


    There is a double taxation treaty between Ireland and the United Kingdom.

    In outline it works the same as most treaties. There are rules to determine which jurisdiction or jurisdictions can tax a particular source of income. If both Ireland and the UK want to tax income then there are rules to decide who gets first go at it. Then the other country taxes it as well, but has to give a credit for any tax already paid. That's how double taxation is avoided.

    Most of the time you end up paying an amount of tax which is equivalent to what would be charged in the higher of the two countries.

    Beyond that you really need professional assistance. There is a long involved definition of "resident of" which is most important for all double tax issues. Being a "resident of" either Ireland of the UK is not the same as being "resident in" a place. It's further complicated because the tax years in Ireland and the UK are not the same - the UK still works on 5 April year ends.


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