Capital gains tax/Double taxation

stankovic84

I’ve recently sold my house in the UK and paid the Capital gains tax there.I’ve returned to Ireland and bought a house here which i am planning to rent out and then head to Asia.I was due to fly in early April but that was cancelled so essentially i am stuck for the minute without work or income having just bought the house/expenses etc.

I applied for JSA without any PRSI built up having having been away for over 5 years.One condition is habitual residence which i was told i should fill out.My main worry being that by stating i am a habitual resident i will liable to pay Irish Capital Gains Tax here also even though i haven’t been living here constantly just back on holidays then living here constantly from February onwards.

Anybody in a similar situation?

tanit

stankovic84 wrote: »

I’ve recently sold my house in the UK and paid the Capital gains tax there.I’ve returned to Ireland and bought a house here which i am planning to rent out and then head to Asia.I was due to fly in early April but that was cancelled so essentially i am stuck for the minute without work or income having just bought the house/expenses etc.

I applied for JSA without any PRSI built up having having been away for over 5 years.One condition is habitual residence which i was told i should fill out.My main worry being that by stating i am a habitual resident i will liable to pay Irish Capital Gains Tax here also even though i haven’t been living here constantly just back on holidays then living here constantly from February onwards.

Anybody in a similar situation?

If you have not been in Ireland for more than 5 years, you are not either ordinarily resident or resident from the tax point of view. From the Welfare point of view, my guess is, that you are going to also not be habitual resident. Considering, as well, that you intend to leave the country as soon as this is over, I am not sure what level of entitlements you might have. You are technically a "tourist". You are going to have to talk with them and explain them your situation.

If what you were selling in the UK was your Private Permanent Residency, there is a the PPR relief that should apply to you even if you need to declare the sale of your house in the UK. Not to speak that under DTT whatever taxes you paid in the UK can be use as a credit to cover liabilities that might arise in Ireland.

Regarding the paying of CGT, you might be covered under the 5 year rule, maybe, if you were previously ordinarily resident in Ireland. So staying for 1 or 2 months, and leaving should not affect that. But it is very technical whether you can avail of that rule and you should get proper advice in that area. In any case you might not even need to try to make use of this, if the sale falls under the PPR relief.

The tax advice would also need to cover the area of becoming a non-resident landlord when you leave the country and the taxation of those rents/income as those would come under the scope of taxation in Ireland regardless of where you live. By what you are writing here I am not sure you are getting tax advice in Ireland and you clearly need it.

I am open to correction by other people in here

VanHalen

Just so I understand, the habitual residence condition which you say you “were told to fill out”, does this mean you were “told” to make a false declaration?

You haven’t been here for 5 years so no contribution to the state and will be leaving as soon as it’s over and you’re afraid you’ll get stung for tax if you state you’ve been living here in order to claim benefits?

Calahonda52

stankovic84 wrote: »

I’ve recently sold my house in the UK and paid the Capital gains tax there.I’ve returned to Ireland and bought a house here which i am planning to rent out and then head to Asia.I was due to fly in early April but that was cancelled so essentially i am stuck for the minute without work or income having just bought the house/expenses etc.

I applied for JSA without any PRSI built up having having been away for over 5 years.One condition is habitual residence which i was told i should fill out.My main worry being that by stating i am a habitual resident i will liable to pay Irish Capital Gains Tax here also even though i haven’t been living here constantly just back on holidays then living here constantly from February onwards.

Anybody in a similar situation?

So is this SW fraud/tax evasion.

You can't have it both ways.
In terms of being a non res landlord, have you looked at all that that entails or will it be black economy?

stankovic84

tanit wrote: »

If you have not been in Ireland for more than 5 years, you are not either ordinarily resident or resident from the tax point of view. From the Welfare point of view, my guess is, that you are going to also not be habitual resident. Considering, as well, that you intend to leave the country as soon as this is over, I am not sure what level of entitlements you might have. You are technically a "tourist". You are going to have to talk with them and explain them your situation.

If what you were selling in the UK was your Private Permanent Residency, there is a the PPR relief that should apply to you even if you need to declare the sale of your house in the UK. Not to speak that under DTT whatever taxes you paid in the UK can be use as a credit to cover liabilities that might arise in Ireland.

Regarding the paying of CGT, you might be covered under the 5 year rule, maybe, if you were previously ordinarily resident in Ireland. So staying for 1 or 2 months, and leaving should not affect that. But it is very technical whether you can avail of that rule and you should get proper advice in that area. In any case you might not even need to try to make use of this, if the sale falls under the PPR relief.

The tax advice would also need to cover the area of becoming a non-resident landlord when you leave the country and the taxation of those rents/income as those would come under the scope of taxation in Ireland regardless of where you live. By what you are writing here I am not sure you are getting tax advice in Ireland and you clearly need it.

I am open to correction by other people in here

Thanks,that clears things up a bit.From my understanding of the Non-resident rental income taxation it’s 20% for my income bracket and the tenants deduct it from the rent money to pay revenue.I’ll double check this though.

Thanks for your help.

stankovic84

VanHalen wrote: »

Just so I understand, the habitual residence condition which you say you “were told to fill out”, does this mean you were “told” to make a false declaration?

You haven’t been here for 5 years so no contribution to the state and will be leaving as soon as it’s over and you’re afraid you’ll get stung for tax if you state you’ve been living here in order to claim benefits?

Yes i was told to fill out the form...i didn’t make any false declarations on it.I gave exact dates of when i entered/left the country.

Well i am going to be paying Rental income Tax for the next 3/5 years so any money that i receive from social welfare i’ll be paying back triple in rental taxes.I have also already paid Tax on that money in both the UK and Australia, so it hardly seems fair to get to get taxed on it again.

stankovic84

Calahonda52 wrote: »

So is this SW fraud/tax evasion.

You can't have it both ways.
In terms of being a non res landlord, have you looked at all that that entails or will it be black economy?

It’s not social welfare fraud or tax evasion.All forms were filled out truthfully and backed up with tickets bank a/c s etc.Not Tax evasion either i have already paid the tax in the UK.

I have the tenant will be deducting 20% and paying revenue.

tanit

stankovic84 wrote: »

Yes i was told to fill out the form...i didn’t make any false declarations on it.I gave exact dates of when i entered/left the country.

Well i am going to be paying Rental income Tax for the next 3/5 years so any money that i receive from social welfare i’ll be paying back triple in rental taxes.I have also already paid Tax on that money in both the UK and Australia, so it hardly seems fair to get to get taxed on it again.

You should get relief under DTT for any taxes you pay in Ireland or just pay a little bit for any difference in rates. If you are paying full taxes is because you are not getting proper tax advice. Again I recommend you get it.

stankovic84

tanit wrote: »

You should get relief under DTT for any taxes you pay in Ireland or just pay a little bit for any difference in rates. If you are paying full taxes is because you are not getting proper tax advice. Again I recommend you get it.

Thanks,yes i think it would save a lot of hassle if i know exactly what allowances are there and what i am entitled to.Cheers!