Capital gains tax after leaving Ireland

yvor

I have a question about taxing capital gains and double taxation.

I am currently a resident in Ireland. Let's say I buy some stock using a non-Irish broker based in EU.

Then sometime in future I decide to move to a different country that does have a Double Taxation Treaty with Ireland and I lose my Irish residency status. I become a resident with a domicile in that country.

At that point, where does the capital gain acquired from the stock I originally bought while being a resident in Ireland need to be taxed?

What factors are relevant? Does it matter if the stock was held for a longer time while being away from Ireland than before? I assume the other country does.


I tried reading the treaty with Slovakia and the relevant part seems to be Art.13/5 'Gains from the alienation of any property, other than that referred to in the preceding paragraphs of this Article, shall be taxable only in the Contracting State of which the alienator is a resident.', but I am getting a contradictory information on whether I interpret it correctly or what other tax code is relevant.


The treaty with Germany has Art.13/6 (below), which is not present in the treaty with Slovakia. I am mostly interested to know what's the situation when moving to Slovakia, but it'd be interesting to know about other countries as well, if there is some overview.

'Where an individual was a resident of a Contracting State for a period of 3 years or more and has become a resident of the other Contracting State, paragraph 5 shall not prevent the first-mentioned State from taxing under its domestic law an amount that is effectively determined by reference to the capital appreciation of the shares in a company for the period of residence of that individual in the first mentioned State. In such case, the appreciation of capital by reference to which the amount was taxed in the first-mentioned State shall not be included in the determination of the subsequent appreciation of capital by the other State.'

dennyk

It can be a complicated matter, but generally you wouldn't owe any tax in Ireland on a capital gain realized from disposal of a non-Irish asset provided you are not resident, ordinarily resident, or domiciled in Ireland at the time the asset was disposed of and none of the proceeds from the gain were remitted to Ireland, regardless of how long you held said asset while you were resident in Ireland.

That said, the laws about Irish tax residency are far from simple, so you'd need to make absolutely certain that you are not considered resident, ordinarily resident, or domiciled in Ireland at the time you dispose of the assets in question if you want to avoid paying Irish tax on the disposal. Also, keep in mind that certain foreign assets might be subject to other Irish taxes or deemed disposal taxes during the period of your residence in Ireland even if you don't actually dispose of said assets while you are resident here. You'd definitely want to consult with a tax professional with experience in Irish taxes for emigrates who can directly advise you on your specific situation.

yvor

Thank you for the answer! It looks like asking a tax consultant will be a good idea when this becomes relevant. Right now it's more speculative to get an idea what tax rate can I expect on longer term investments.

The question is focused on shares listed in US stock market.

dennyk wrote: »

keep in mind that certain foreign assets might be subject to other Irish taxes or deemed disposal taxes during the period of your residence in Ireland even if you don't actually dispose of said assets while you are resident here.

This reminds me of one explanation I was given - It said I'd need to pay the capital gain tax at the time of changing the residency based on what the then current value would be even if assets would be not disposed. The thing is I cannot find any resource that'd be supporting this. Plus, it seems to be contradicting international treaties.

wiggle16

It's really not possible to speculate. All of the double taxation treaties are different - both countries want to maximise their collection of tax so these treaties are extremely complicated and very difficult to interpret until you have the specifics of a situation. Dennyk's answer above is probably the closest you will get to an answer that is generally true across the board.