Tax due in Ireland for foreigner selling home in home country

shawty

If an Italian person, who has been living and working in Ireland for 10 years, sells property they own outside Ireland do they have to pay any tax on the sale of the property when transferring the money back into Ireland?

dennyk

You'd need to pay capital gains tax on any gains realized from the sale when you sell the property if you are tax-resident in Ireland at the time of disposal, even if the money in question isn't transferred to Ireland. You may be able to take a credit for any capital gains taxes you paid in Italy on the disposal, however. Check out Revenue's web site on CGT for all the details and instructions.

Note that you can claim the Principal Private Residence Exemption if you sell a qualifying foreign property. However, it's very unlikely yours would qualify for PPR relief if you've not lived in your Italian property for a decade; you're generally only allowed to claim it if you last lived in the property as your principal residence within the past 12 months.

JustAThought

Do.you think their ststems are hooked up!?
If.you didnt have to transfer the money all in one go or could move it as needed from Italy would you be worrying abkut declaring and paying tax? I'm sure there are tax.consultants that can investigate and give advice. Might be well worth the investment.

dennyk

Committing tax fraud is always a bad idea. If you get caught, the penalties will always be much more expensive than just paying the proper taxes in the end (not to mention the possibility of jail time if your offence is significant enough and is deemed deliberate fraud...).

tanit

JustAThought wrote: »

Do.you think their ststems are hooked up!?
If.you didnt have to transfer the money all in one go or could move it as needed from Italy would you be worrying abkut declaring and paying tax? I'm sure there are tax.consultants that can investigate and give advice. Might be well worth the investment.

They are starting to exchange more and more tax information and the banks in Ireland are obliged to inform of any big money transfers. I transferred some money from Spain after my father's death and it was perfectly legal and way below any thresholds for CAT and the like and they were asking.

That said he will only be liable to CGT on a remittance basis (money brought into Ireland) if he is non-domiciled and might be entitled to claim a tax credit equivalent to any taxes he has paid in Italy depending of the DTT with Italy and the liability to pay in Ireland maybe very little or none depending on the rates they have in Italy.

My advice is to get proper advice with an advisor with foreign/Italy tax experience

shawty

dennyk wrote: »

You'd need to pay capital gains tax on any gains realized from the sale when you sell the property if you are tax-resident in Ireland at the time of disposal, even if the money in question isn't transferred to Ireland. You may be able to take a credit for any capital gains taxes you paid in Italy on the disposal, however. Check out Revenue's web site on CGT for all the details and instructions.

Note that you can claim the Principal Private Residence Exemption if you sell a qualifying foreign property. However, it's very unlikely yours would qualify for PPR relief if you've not lived in your Italian property for a decade; you're generally only allowed to claim it if you last lived in the property as your principal residence within the past 12 months.

Thanks for the link. 33% - they can't be serious, that's so high. If they dropped it to 10% they would end up getting more back as people would be less likely to go out of there way to avoid paying.

shawty

shawty wrote: »

Thanks for the link. 33% - they can't be serious, that's so high. If they dropped it to 10% they would end up getting more back as people would be less likely to go out of there way to avoid paying.

Scratch that it says 40% on foreign investments.

Seems fair :(

dennyk

shawty wrote: »

Scratch that it says 40% on foreign investments.

Seems fair :(

Note that the 40% rate only applies to certain types of foreign investment products, not all foreign "property" in general (chattel, real estate, etc.). You can check with Revenue about how your specific property would be treated; they'll likely be happy to provide guidance.

Edit: Also, remember that CGT is only applied to gains you realize from the sale of property, not the full selling price (unless you obtained the property at no cost somehow). This document (warning: PDF) explains the rules in much greater detail.

malpes180

dennyk wrote: »

You'd need to pay capital gains tax on any gains realized from the sale when you sell the property if you are tax-resident in Ireland at the time of disposal, even if the money in question isn't transferred to Ireland.

That's not completely true. Even if he's tax resident in Ireland if he doesn't remit the gains into Ireland he's only supposed to pay the Irish tax if he's Irish domiciled. If he's an Italian citizen born in Italy with links to Italy then he's very likely to be Italian domiciled, and therefore he's not taxed on the profits made in Italy unless they are remitted to Ireland.

Maples180