VRT - moving to Belfast but home at weekends only

simyc1

Hi Folks,

Been doing a bit of reading up on the site RE VRT stuff, and i'm fairly familiar with the rules legislation having fallen foul of it with an NI reg car I didn't get transferred etc... but have a query i'd like your opinion on the following.

Currently = Wife and I resident (mortgage) in Donegal....
We have a DL reg car used daily to commute to Belfast and an NI reg car sits outside house because we are residents of the state and therefore not permitted to drive an unregistered vehicle in the state.

Future = Work is taking my wife to Belfast everyday... and although I am currently unemployed, having spent last 3yrs with HSE paying PRSi etc, I am seeking work in the Belfast area too. Once I get a job up there our intention at this stage is to rent a house in Belfast. Therefore we will be in Belfast from Mon-Fri, intending to return to our property (two dogs in tow) in Donegal at the weekends.

A max of 2-3 days per week will be spent in Donegal 104-156 days per yr. (Aware of residency rules also stating 185 days per yr in state)

1) The BIG BIG question therefore is.... Will We be permitted to drive an NI reg car down here at the weekends, as we'd very much like to change the car.
(NB both our driving licenses are UK ones)

2) How will this living arrangement affect our residency status??

3) I'm also concerned about the potential impact it may have on our Tax Relief at Source, (mortgage interest rate relief) on the mortgage of our Donegal property, surrounding principle residence etc etc,

All your thoughts a ideas are more than welcome.
Regards

simyc1

ardmacha

In the Motors forum you'll get any amount of opinion on VRT, much of it not informed by actual regulations. Perhaps the taxation forum would be also useful for this one as even you are not quite sure where home is on this one.

If your principal residence in in Donegal then your car should be registered there too. If your principal residence is in Belfast, then you should have to pay second home tax in Donegal. I wouldn't try and tell two different stories to the Revenue as it could catch up on you.

galwaytt

By dint of you working and paying tax in NI, and actually being resident there the majority of the time, you will be an NI resident, and you can drive your NI reg car.

Your residency will become NI.

Your principle residence will be your NI rented address, iirc. I'm not familiar with UK tax regime, so you need to check with them if you can claim any interest relief at all. I suspect, you may not........but I'd just ring NI Revenue, tbh - go straight to the source.

I wouldn't go running into your bank volunteering a whole bunch, at this stage, btw, no point in them getting pre-emptive.........

keithclancy

simyc1 wrote: »

Hi Folks,

Been doing a bit of reading up on the site RE VRT stuff, and i'm fairly familiar with the rules legislation having fallen foul of it with an NI reg car I didn't get transferred etc... but have a query i'd like your opinion on the following.

Currently = Wife and I resident (mortgage) in Donegal....
We have a DL reg car used daily to commute to Belfast and an NI reg car sits outside house because we are residents of the state and therefore not permitted to drive an unregistered vehicle in the state.

Future = Work is taking my wife to Belfast everyday... and although I am currently unemployed, having spent last 3yrs with HSE paying PRSi etc, I am seeking work in the Belfast area too. Once I get a job up there our intention at this stage is to rent a house in Belfast. Therefore we will be in Belfast from Mon-Fri, intending to return to our property (two dogs in tow) in Donegal at the weekends.

A max of 2-3 days per week will be spent in Donegal 104-156 days per yr. (Aware of residency rules also stating 185 days per yr in state)

1) The BIG BIG question therefore is.... Will We be permitted to drive an NI reg car down here at the weekends, as we'd very much like to change the car.
(NB both our driving licenses are UK ones)

2) How will this living arrangement affect our residency status??

3) I'm also concerned about the potential impact it may have on our Tax Relief at Source, (mortgage interest rate relief) on the mortgage of our Donegal property, surrounding principle residence etc etc,

All your thoughts a ideas are more than welcome.
Regards

simyc1

http://vrt.ie/vrtDetail.php?page=23

Difference between State resident and non-resident:

A State resident is a person whose normal residence is in the Republic of Ireland and a "non-resident" is anyone whose normal residence is outside the State. Normal residence means the place where a person usually lives (for at least 185 days each year) because of personal or occupational ties.

As long as you have it Taxed, Insured and MOT'd at your NI Residence and that is place you normally live and work then your fine.

However if you get stopped by Customs the burden will be on you to prove this.

For Tax Purposes , if you live in two homes, you can elect to Declare your primary residence if you commute between the two countries for work.

simyc1

ardmacha wrote: »

If your principal residence in in Donegal then your car should be registered there too. If your principal residence is in Belfast, then you should have to pay second home tax in Donegal. I wouldn't try and tell two different stories to the Revenue as it could catch up on you.

Ardmacha, thing is does "principal residence" not differ for tax purposes.. in that principal residence relates to mortgage interest rate relief. Does this apply to rented accomodation as the potential place in Belfast will only be rented. Therefore would my princiapl residence (house that we own) would be donegal. So am I right in saying that second home tax only applies if I own the Belfast property.

simyc1

galwaytt wrote: »

you working and paying tax in NI, and actually being resident there the majority of the time, you will be an NI resident, and you can drive your NI reg car.

Your residency will become NI.

This is what I thought too.. but want to be crystal before buying a good NI Car... and getting caught to pay VRT, or fined again for driving it in the South.

galwaytt wrote: »

Your principle residence will be your NI rented address, iirc. I'm not familiar with UK tax regime, so you need to check with them if you can claim any interest relief at all.

Thanks Galway.. up North they don't do Tax Relief on mortgages... your mortgage is your mortgage full stop. But i'm concerned as i've email the tax crowd and they're answer is just a tad muddy... and unprecise...

Any thoughts

simyc1

keithclancy wrote: »

http://vrt.ie/vrtDetail.php?page=23


For Tax Purposes , if you live in two homes, you can elect to Declare your primary residence if you commute between the two countries for work.

Keith... obviously due to the massive cost of insuring and taxing a car down here... i'd elect to have the NI address as my residence....

But am I trying to have my cake and eat it when it applies to TRS on the Mortgage as I wouldn't own the UK property and so am I still entitled to claim it on my Doengal house???

Simon

P.C.

simyc1 wrote: »

Keith... obviously due to the massive cost of insuring and taxing a car down here... i'd elect to have the NI address as my residence....

But am I trying to have my cake and eat it when it applies to TRS on the Mortgage as I wouldn't own the UK property and so am I still entitled to claim it on my Doengal house???

Simon

You can NOT eat your cake and have it.

You need to decided where you want your 'normal' residence to be, and then you have to take the good and the bad that go with it.

So, you can NOT get morgage interest relief on a house in the Republic, and drive a NI car.

dumbyearbook

P.C. wrote: »

You can NOT eat your cake and have it.

You need to decided where you want your 'normal' residence to be, and then you have to take the good and the bad that go with it.

So, you can NOT get rent relief on a house in the Republic, and drive a NI car.

Read the OPs post he is asking about mortgage interest relief on his own house which he owns in Donegal not rent "relief" (it's actually called rent allowance.)

simyc1

I've no intention of looking for any sort of Rent allowance... if I have to pay rent... I have to pay rent out of my own pocket.

Its the issue surrounding the term, (and I quote from the revenue.ie website -

""Section 2: What is a Qualifying Mortgage?
A qualifying mortgage for the purpose of interest relief is a secured loan, used to purchase, repair, develop or improve your sole or main residence, situated in the State""

Should we go for rented accomodation in Belfast during the week, it will be just that, rented, and therefore not my own residence.

On the other hand does the above quote from revenue.ie mean that my own home, which I pay the mortgage on and will return to each weekend, will no longer be classified as my "sole or main residence".

Del2005

simyc1 wrote: »

I've no intention of looking for any sort of Rent allowance... if I have to pay rent... I have to pay rent out of my own pocket.

Its the issue surrounding the term, (and I quote from the revenue.ie website -

""Section 2: What is a Qualifying Mortgage?
A qualifying mortgage for the purpose of interest relief is a secured loan, used to purchase, repair, develop or improve your sole or main residence, situated in the State""

Should we go for rented accomodation in Belfast during the week, it will be just that, rented, and therefore not my own residence.

On the other hand does the above quote from revenue.ie mean that my own home, which I pay the mortgage on and will return to each weekend, will no longer be classified as my "sole or main residence".

You can't claim TRS on you're main residence in Donegal if you claiming NI residency.

From revenue

Am I eligible for mortgage interest relief if I live and/or work in the U.K.?

If you are living in the State and paying a mortgage to a qualifying lender in the State but working in Northern Ireland, you can claim mortgage interest relief in this country, provided you have a PPS number. If you do not have a PPS number, you must apply for one from the Department of Social Protection.

You'll need to sit down and work out if it's cheaper to have a NI car(s) and pay your full mortgage or have an ROI car and get TRS. There's no way to keep both.

simyc1

There you go Del... confusing me again...

Whilst I understand your post eactly.... it evokes the thoughts again that Donegal is my "main" residence, and it is situated in the state. After all I own it (or will do in 30yrs ),

So where on earth do I stand in terms of Cars... i'd be spending most of the time in NI, so surely for tax and insurance purposes, as i'd be spending most of my time up north and so would be best placed with northern details... after all certain areas of Belfast where a DL reg will surely not be too welcome.

stealthyspeeder

Im not sure about this advice saying that if you would not have to pay VRT....

According to VRT 2 leaflet which explains excemptions for residency, if your occupational residense is different from your personal residence, then your personal residence is considered your residence by customs for the purposes of VRT. This would squarely put your personal residence in ROI as you have a mortgage and a marrige license in ROI.

jimmycrackcorm

OP, in simple terms, because your home is in the south then you are still classed as being resident here. should the customs see a pattern of regular visits here then they will chase you for VRT. Once they know your house is your home then it won't matter that you are working in N.I.

However if you can clearly show that your residence is now in the North then you will be ok. That means showing that both you and your spouse have NI. license, both working in N.I. paying rent / other bills etc. then you'll be ok.

I know this because I went through this process before and was able to import my car without VRT after a year.

keithclancy

Ok, I'll break it down a bit.

Currently = Wife and I resident (mortgage) in Donegal....
We have a DL reg car used daily to commute to Belfast and an NI reg car sits outside house because we are residents of the state and therefore not permitted to drive an unregistered vehicle in the state.

Your not allowed to own a foreign registered car in the state , nor have a lease or rental car. Driving it makes no difference, you could have a written off wreck in the driveway and its still liable for VRT.

Future = Work is taking my wife to Belfast everyday... and although I am currently unemployed, having spent last 3yrs with HSE paying PRSi etc, I am seeking work in the Belfast area too. Once I get a job up there our intention at this stage is to rent a house in Belfast. Therefore we will be in Belfast from Mon-Fri, intending to return to our property (two dogs in tow) in Donegal at the weekends.

A max of 2-3 days per week will be spent in Donegal 104-156 days per yr. (Aware of residency rules also stating 185 days per yr in state)

Remember when your working in the UK, you will no income in Ireland so will lose whatever entitlements for claims you have now on your ROI wages (Except for the Mortgage Interest Relief aslong as you do not rent it out)

1) The BIG BIG question therefore is.... Will We be permitted to drive an NI reg car down here at the weekends, as we'd very much like to change the car.
(NB both our driving licenses are UK ones)

Honestly your license makes no difference, there are shed loads of Irish people with UK/German/Dutch/French licenses.

2) How will this living arrangement affect our residency status??

You will be seen by default as UK Resident, unless you declare at the end of the year that you are Tax resident in the Republic. However you cannot apply this to taxes that are based on having an income in the Republic.

3) I'm also concerned about the potential impact it may have on our Tax Relief at Source, (mortgage interest rate relief) on the mortgage of our Donegal property, surrounding principle residence etc etc,

AFAIK this makes no difference (bizarrely) as long as you do not rent out the property.

From the Revenue:
http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html

You do not have to be earning a taxable income to qualify for mortgage interest relief.

As long as it remains your Primary Residence:

Mortgage interest on a loan taken out for investment, rental, secondary or any properties other than your main residence does not qualify for interest relief. Mortgage relief for rental properties as part of your business is available through the tax system and you should contact your local Tax Office.

From the looks of it though you need to elect a primary residence in your case, i.e. You house by default will no longer your primary residence unless you declare otherwise. You could have a car and not be subject to VRT, but would lose your Mortgage Interest Relief.

Lots of ways around it though and it might be worth talking to someone that specialises in Cross Border Taxation. VRT would be the least of your worries considering the Revenue are looking at sqeezing out every last cent they can at the moment.

simyc1

Cheers for all the comments folks,

I've dropped an email off to the Mortgage Interest rate advisoer crowd in Letterkenny, against them what the true story is with regard to the Interest rate relief on the house if both my self and my wife move to Belfast and rent a house out, so as soon as I hear back from them i'll update this thread.

Oh and Keithclancy... I think your wrong about VRT on a car in the driveway, its on private property, a a number of folks round my way have cars parked up and no problems, even when the customs guys knocked on the door.

corktina

he isnt wrong. You HAVE to book them in to be re-registered within 7 days of entry to the state.

simyc1

Extract from my email,
.......as I would be living in the north during the week. I am only concerned as to the impacts both myself and my wife living in Belfast (in a rented property) would have upon our current Mortgage Interest Rate Relief on our home in Donegal.

Would we still be eligible to claim it or not?
We will not be renting out our home in Donegal to anyone, as we will return to it at the weekends.
I am concerned primarily due to the wording on the websites as to sole or main residence, and am afraid that if we did go down the route explained above (renting in Belfast) that we would no longer be able to claim the mortgage relief on our propert in Donegal.

As you can imagine the financial implications of this are significant and need to be weighed up before we make any concrete decisions regarding this potential move.


According to the Revenue office in Letterkenny -

""You would continue to be entitled to claim mortgage interest relief on your residence in Donegal as this remains your principal private residence. ""


Happy Days!!!!!!!!,

Now I gotta figure out he Car (VRT) side of things