What tax is liable in this scenario?

Joekers

Hoping to find an answer to a question.

If someone is working and earning money in Ireland then uses this money to build property in another country and then sells this property brining the money back to ireland.

What tax is liable on this ?

Fian

Joekers wrote: »

Hoping to find an answer to a question.

If someone is working and earning money in Ireland then uses this money to build property in another country and then sells this property brining the money back to ireland.

What tax is liable on this ?

If someone is working and earning money in Ireland: Income tax

then uses this money to build property in another country: potentially property tax in that country

and then sells this property : Probably capital gains tax assuming there was an uplift in value. Possibly VAT. Both dependent on teh rules of the other country.

bringing the money back to ireland: CGT on any gains, with a credit for CGT paid abroad.

Kepler21

You should find most answers on the Revenue site

If you are resident, or ordinarily resident, and domiciled in Ireland, you have to pay Irish CGT on foreign property. If you have paid CGT in a foreign country, you may be able to offset this against your Irish CGT.

When calculating your CGT liability, you may deduct the following items:

• the cost of purchasing the asset
• any money spent by you which adds value to the asset (known as 'enhancement expenditure')
• costs (for example, fees paid by you to a solicitor or auctioneer) when you acquired and disposed of the asset.
• You may adjust the purchase price and enhancement expenditure for inflation. This is called indexation relief.

The first €1,270 of taxable gains in a tax year are exempt from CGT. If you are married or in a civil partnership, this exemption is available to each spouse or civil partner but is not transferable.

Calahonda52

Just to add that in the case of losses on disposal in the foreign country, IIRc the losses can be used against gains here, and carried forward.

I don't know if there are any foreign country specific restrictions

Re the indexation relief.
Indexation relief will only apply for the period of ownership of the asset up to 31 December 2002 for any disposals made on or after 1 January 2003.