Ireland and Australia tax on gains

FernandoTorres

Howdy

Hoping someone can help me out here. I'm very financially savvy normally but international tax is not my strong point. Not looking for detailed advice, more just a point in the right direction.

So I'm Irish but have moved to Australia since Feb and plan to be here for a few years at least. I have some cash invested in Rabo funds as well as shares through a US brokerage account. I recently sold some shares at a profit and am also looking to cash in on the Rabo funds too which have made a good profit.

What I'd like to know is how I would be taxed. Here in Oz it's all counted as income, with a 50% discount if you've held the asset over 1 year. In Ireland there's CGT on shares at 33% and also 33% on managed funds. Naturally I'd prefer to pay the Australian tax rather than Irish but looking at the treaty here it's not very clear: http://www.revenue.ie/en/practitioner/law/double/australia.html

It mentions capital gains but only talks about income from property, dividends etc. Does anyone know how it works in practice? At the moment I'm classed as tax resident in both Ireland and Australia.

Cheers

redalan

FernandoTorres wrote: »

Howdy

Hoping someone can help me out here. I'm very financially savvy normally but international tax is not my strong point. Not looking for detailed advice, more just a point in the right direction.

So I'm Irish but have moved to Australia since Feb and plan to be here for a few years at least. I have some cash invested in Rabo funds as well as shares through a US brokerage account. I recently sold some shares at a profit and am also looking to cash in on the Rabo funds too which have made a good profit.

What I'd like to know is how I would be taxed. Here in Oz it's all counted as income, with a 50% discount if you've held the asset over 1 year. In Ireland there's CGT on shares at 33% and also 33% on managed funds. Naturally I'd prefer to pay the Australian tax rather than Irish but looking at the treaty here it's not very clear: http://www.revenue.ie/en/practitioner/law/double/australia.html

It mentions capital gains but only talks about income from property, dividends etc. Does anyone know how it works in practice? At the moment I'm classed as tax resident in both Ireland and Australia.

Cheers

Hi

I am no expert but I suspect that you would have to become a resident for tax purposes in Australia (if possible) and become a non-resident here (I don't know how - sorry). Then, you would fill in a tax return in Oz declaring all your income as an Australian tax resident and letting Rabo and the custodian for your shares know that you are not resident in Ireland and so they would not withold any tax. That way, if you had to pay any taxes on the income or capital gain, they would all be paid in Oz.

Again, I am no tax expert and it would be probably wise to get hold of an accountant in Oz to guide you properly.

I hope that helps in some way.

Al

FernandoTorres

redalan wrote: »

Hi

I am no expert but I suspect that you would have to become a resident for tax purposes in Australia (if possible) and become a non-resident here (I don't know how - sorry). Then, you would fill in a tax return in Oz declaring all your income as an Australian tax resident and letting Rabo and the custodian for your shares know that you are not resident in Ireland and so they would not withold any tax. That way, if you had to pay any taxes on the income or capital gain, they would all be paid in Oz.

Again, I am no tax expert and it would be probably wise to get hold of an accountant in Oz to guide you properly.

I hope that helps in some way.

Al

Thanks for the response. Yeah it's complicated because I'm an Australian tax resident but also still tax resident in Ireland. I've filed my return for Aus already as it's to 30 June. Only sold the shares last week so won't have to declare them until next June here but looks like I may need to file an Irish return in Oct for the Rabo funds and also declare Capital Gains in Dec.

The treaty is supposed to tell you what should be done in this situation but I can't see anywhere it mentions shares and funds! The challenge is finding a tax advisor here who has a clue about Irish tax as well as Australian.

redalan

FernandoTorres wrote: »

Thanks for the response. Yeah it's complicated because I'm an Australian tax resident but also still tax resident in Ireland. I've filed my return for Aus already as it's to 30 June. Only sold the shares last week so won't have to declare them until next June here but looks like I may need to file an Irish return in Oct for the Rabo funds and also declare Capital Gains in Dec.

The treaty is supposed to tell you what should be done in this situation but I can't see anywhere it mentions shares and funds! The challenge is finding a tax advisor here who has a clue about Irish tax as well as Australian.

Sorry I couldnt be of more help. Could you let me know how you go as I may be in a similar situation next year.

Legend100

FernandoTorres wrote: »

Thanks for the response. Yeah it's complicated because I'm an Australian tax resident but also still tax resident in Ireland. I've filed my return for Aus already as it's to 30 June. Only sold the shares last week so won't have to declare them until next June here but looks like I may need to file an Irish return in Oct for the Rabo funds and also declare Capital Gains in Dec.

The treaty is supposed to tell you what should be done in this situation but I can't see anywhere it mentions shares and funds! The challenge is finding a tax advisor here who has a clue about Irish tax as well as Australian.

Hi,
Specifix tax advice is not permitted on this board but I will give you the general outline of your situation and hopefully that helps. I kow it is difficult to get international advice in Australia on a personal level as most tax accountants will not be familiar with it, especially irish tax.

Firstly (and most importantly) do you have PR here in Aus? I think I have read a few of your posts in the Australia Board and from memory you were on a whv/457?

If you don't have PR - forget the treaty, forget tax residence - temporary residents are not liable to australian tax on foreign income/gains. That's it in a nutshell - you are liable to Irish CGT on the gain of the disposal of shares (resident/ord resident & domiciled). As for the managed funds....that is way beyond the scope of this board

If you do have PR.....then that is a different matter and would be the kind of advice that one would charge for!

FernandoTorres

Yeah I came over on the WHV but I'm PR now. Yeah definitely looks like Its best to get professional advice in this case. I know the Big 4, Grant Thornton etc would be best placed but would like to avoid going to them as I've worked there and know how much they charge!

I'll post on a few expat forums and see if there are any independent advisers who have knowledge of both systems. Seems to be plenty if you're coming from UK.

Cheers for the replies!

jj1

I rang tax office in oz today, i worked for 2 months this year in Oz (457 visa may & june) - I worked full time till feb 2013 in ireland. I was told that i had to submit foreign earnings, and I would get a tax credit against it. I explained that the way i read it was "temporary residents are not liable to australian tax on foreign income/gains".

Will i still get the tax back on the money i earned in the two months in OZ, or will the foreign income work against it??

Legend100

jj1 wrote: »

I rang tax office in oz today, i worked for 2 months this year in Oz (457 visa may & june) - I worked full time till feb 2013 in ireland. I was told that i had to submit foreign earnings, and I would get a tax credit against it. I explained that the way i read it was "temporary residents are not liable to australian tax on foreign income/gains".

Will i still get the tax back on the money i earned in the two months in OZ, or will the foreign income work against it??

The person in the tax office is incorrect (the people you get on the phone would have similar levels of tax knowledge as those in the local Revenue offices at home when you ring there)

From the ITAA97
"S768‑910 Income derived by temporary resident
(1) The following are * non‑assessable non‑exempt income:
(a) the * ordinary income you * derive directly or indirectly from a source other than an * Australian source if you are a * temporary resident when you derive it;
(b) your * statutory income (other than a * net capital gain) from a source other than an Australian source if you are a temporary resident when you derive it."


Non assessable non exempt in plain terms means does not go on your tax return. Foreign employment income is only assessable in Aus on a 457 if you undertake employment abroad for a short period while still a temporary resident (not before becoming one or ceasing to be one). You will get the tax back on your australian earnings and can disregard your irish employment income (assuming you paid tax and are actually due a refund)


As an aside for Mods - this might be better in the Australia forum as there is a thread on Australian tax returns in there
http://www.boards.ie/vbulletin/showthread.php?t=2056992786

jj1

Thanks a million, yes was PAYE in ireland so tax all paid :-)

really appreciate the info