Capital Gains Tax when living abroad

Nasesco

Hi all. I left Ireland permanently in 2006 and have lived and worked abroad ever since. I'm hoping to come home in the next 12 months and was wondering what my capital gains tax liability would be on the Irish property and Irish bank shares I bought a few years ago.

I want to sell the shares and house to fund the purchase of what will hopefully be our permanent home when we move back. Does anyone know if I should pay capital gains in Ireland or Australia (where I have been resident for tax purposes for 5 years)?

Cheers,
Sean

dogsears

Can't help re Australian tax but if you sell the house in Ireland you'll be liable for Irish CGT whether you do so before you come back or not. If this leads to Australian tax as well, there is a Double Tax Treaty between the 2 countries so that tax paid in Ireland can be set off against tax payable in Australia.

If you sell the shares before you come back it most likely won't be liable to Irish tax but your residence position will be relevant and it might be complicated.

Best thing you can do is get professional advice before you take any decisions.

newacc2015

dogsears wrote: »

Can't help re Australian tax but if you sell the house in Ireland you'll be liable for Irish CGT whether you do so before you come back or not. If this leads to Australian tax as well, there is a Double Tax Treaty between the 2 countries so that tax paid in Ireland can be set off against tax payable in Australia.

If you sell the shares before you come back it most likely won't be liable to Irish tax but your residence position will be relevant and it might be complicated.

Best thing you can do is get professional advice before you take any decisions.

Are you sure? If you are non-resident(which OP is) how can you be liable for it? Denis O Brien was non-resident when he sold Digicell, so he didnt have to pay CGT.

nompere

newacc2015 wrote: »

Are you sure? If you are non-resident(which OP is) how can you be liable for it? Denis O Brien was non-resident when he sold Digicell, so he didnt have to pay CGT.

Beyond any doubt - Irish land and other specified assets are always within the charge to CGT no matter where the owner is resident.

dogsears

newacc2015 wrote: »

Are you sure? If you are non-resident(which OP is) how can you be liable for it? Denis O Brien was non-resident when he sold Digicell, so he didnt have to pay CGT.

Most countries that have a CGT or equivalent don't charge non-residents CGT but some countries, including Ireland, make an exception for land situated in the country or shares whose value comes from such land.

The Denis O'Brien shares didn't derive their value from Irish land and so fell outside the CGT net. If they had, his gain would have been taxable.

Nasesco

dogsears wrote: »

Can't help re Australian tax but if you sell the house in Ireland you'll be liable for Irish CGT whether you do so before you come back or not. If this leads to Australian tax as well, there is a Double Tax Treaty between the 2 countries so that tax paid in Ireland can be set off against tax payable in Australia.

If you sell the shares before you come back it most likely won't be liable to Irish tax but your residence position will be relevant and it might be complicated.

Best thing you can do is get professional advice before you take any decisions.

Just noticed according to revenue.ie that I will also have to pay cgt on shares also regardless of country of residence dogsears... cant copy the link as I'm a new user... cut and paste job..

Capital Gains Tax FAQs
Chargeable Assets

All forms of property are assets for CGT purposes whether situated in or outside the State. Examples of assets are:
Land
Shares
Goodwill
Currency, other than Irish currency

barneystinson

Nasesco wrote: »

Just noticed according to revenue.ie that I will also have to pay cgt on shares also regardless of country of residence dogsears... cant copy the link as I'm a new user... cut and paste job..

Capital Gains Tax FAQs
Chargeable Assets

All forms of property are assets for CGT purposes whether situated in or outside the State. Examples of assets are:
Land
Shares
Goodwill
Currency, other than Irish currency

No. Just because something is an asset for CGT purposes doesn't mean as a non-resident you'll have to pay CGT on its sale.

dogsears

Nasesco wrote: »

Just noticed according to revenue.ie that I will also have to pay cgt on shares also regardless of country of residence dogsears... cant copy the link as I'm a new user... cut and paste job..

Capital Gains Tax FAQs
Chargeable Assets

All forms of property are assets for CGT purposes whether situated in or outside the State. Examples of assets are:
Land
Shares
Goodwill
Currency, other than Irish currency

That just means the definition of assets for CGT includes non-irish assets. It doesn't relate to who is chargeable when disposing of such assets or in what circumstances. Your residence and the situation of the assets are different things. If you are non-resident then the charge doesn't cover disposals of shares that don't derive their value from Irish land.

Nasesco

Makes sense. Thanks very much guys