Returning to Ireland mid year

coL

Hi,

I am planning to return to Ireland from the Middle East at the start of September. I will have been there for 9 years.

From my research it appears to me that if I return on 1 September I will not be resident for tax purposes in that tax year. Therefore the question of split year treatment does not apply.

It also appears that to obtain my full tax credits I need to elect to be resident in the state for the tax year otherwise tax credits are calculated on a proportional basis.

My questions are these:

If I elect to be tax resident for my year of return will my worldwide income up to that point be taxable in Ireland or can the split year treatment be applied so that I just pay tax on my Irish income from the date of my return?

Following on from this do I need to specifically apply for the split year treatment in a specific manner or is it automatic?



Depending on the answers above I may not elect to be tax resident in my year of return.

If I don't elect to be tax resident for the year of my return it appears that my tax credits will be calculated as follows:

"As a non-resident, you may be entitled to a proportion of tax credits and reliefs. This proportion is determined by the relationship between your income for the tax year which is subject to Irish tax and your income from all sources (in other words, Irish income divided by all income)."

Based on this scenario my questions are:

What is classed as "income from all sources" in this case, is it my salary earned abroad or just any Irish income outside employment income?

How is income from all sources ascertained and verified?



Any help or guidance would be appreciated.

Mr. Incognito

You are only assessed on income from the date of election.

Income earner prior is known as capitalised income and is not taxable in Ireland.

Heisenburg81

Mr. Incognito wrote: »

You are only assessed on income from the date of election.

Income earner prior is known as capitalised income and is not taxable in Ireland.

Split year relief applies to Schedule E income only, so any foreign deposit interest or rents etc earned in 2017 both pre and post arrival back becomes taxable.

coL

Once I leave my position here and return to Ireland I will have no income from anywhere else in the world.

My fear was that by electing to become tax resident in Ireland for the year all my income up to that point would become taxable in Ireland. It was unclear to me if the split year treatment would apply in that situation.

So just to confirm my understanding, if I return to Ireland in September I can elect to become tax resident for that tax year and avail of all my tax credits. If I do this then the split year treatment will apply and none of the income I have earned before my return date will be taxable?

Heisenburg81

coL wrote: »

Once I leave my position here and return to Ireland I will have no income from anywhere else in the world.

My fear was that by electing to become tax resident in Ireland for the year all my income up to that point would become taxable in Ireland. It was unclear to me if the split year treatment would apply in that situation.

So just to confirm my understanding, if I return to Ireland in September I can elect to become tax resident for that tax year and avail of all my tax credits. If I do this then the split year treatment will apply and none of the income I have earned before my return date will be taxable?

You are deemed resident from date of arrival back and only taxed on employment income from that date. You get a full years credits.

Bubbaclaus

Mr. Incognito wrote: »

You are only assessed on income from the date of election.

Income earner prior is known as capitalised income and is not taxable in Ireland.

This is incorrect. Income earned before 1 January of the year of election is capitalised income. You are electing for the calendar year, not just the period you returned for.

Employment income earned pre returning will not be taxable due to split year, but any other income (Investments etc) earned in the calendar year of election would be taxable.

coL

Just to confirm, in this scenario there is no income other than employment income. On that basis is my understanding correct?