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residence for tax purposes

  • #2
    Registered Users Posts: 300 ✭✭ beaufoy


    I am english and between 2005 and 2018 I lived with my thai wife in thailand
    In 2013 and 2014 I bought properties in Ireland
    In 2018 we moved to ireland
    In 2018 I lived here for 5 months
    In 2019 I lived here for 8 months
    In 2020 I lived here for 6 months
    In 2021 i have lived here for 3months

    From the above it can be ascertained that I have not resided here for over 6 months for 3 consecutive years

    My intention is to sell most of my irish properties just keeping 2or 3 and move back to thailand for the rest of my life ...as i have not spent enough time to qualify for full irish residence can i move back to thailand and straight away regain my status as an off shore/foreign property owner


Comments

  • #2


    beaufoy wrote: »
    As i have not spent enough time to qualify for full irish residence can i move back to thailand and straight away regain my status as an off shore/foreign property owner

    What does this bit mean, or what do you think it means? Like, how do you think you will be treated differently? And if you never were tax resident here, by your own estimation, you don't have anything to regain, since your status would never have changed...?


  • #2


    What does this bit mean, or what do you think it means? Like, how do you think you will be treated differently? And if you never were tax resident here, by your own estimation, you don't have anything to regain, since your status would never have changed...?

    at the moment i am just floating an idea...yes nothing has as yet changed but come end of june if i am still here i will have reached the 3 years and things will change and if i wait till then i will have to apply for non residence status if i do go... in nov of this year i qualify for my uk state pension if at said time i have irish residence the pension will be taxed, but index linked. I believe if i have thai residence it will not be taxed however it will not increase every year....swings and roundabouts. I believe also if i am a thai resident i will not be taxed so heavily on my shares


  • #2


    beaufoy wrote: »
    I am english and between 2005 and 2018 I lived with my thai wife in thailand
    In 2013 and 2014 I bought properties in Ireland
    In 2018 we moved to ireland
    In 2018 I lived here for 5 months
    In 2019 I lived here for 8 months
    In 2020 I lived here for 6 months
    In 2021 i have lived here for 3months

    From the above it can be ascertained that I have not resided here for over 6 months for 3 consecutive years

    My intention is to sell most of my irish properties just keeping 2or 3 and move back to thailand for the rest of my life ...as i have not spent enough time to qualify for full irish residence can i move back to thailand and straight away regain my status as an off shore/foreign property owner
    There’s no such concept in Ireland as “full residence”. There’s residence, and there’s ordinary residence.

    You are tax-resident in Ireland for a given tax year if you satisfy any one of three tests:

    1. You are in Ireland for more than 180 days in that tax year. They don’t have to be consecutive days.

    2. You are in Ireland for more than 280 days in [that tax year + the previous tax year], with at least 30 of those days falling in this tax year and at least 30 falling in the previous year.

    3. You arrive in Ireland in that tax year, and will be resident in the following tax year. You aren’t in Ireland for more than 180 days in the year of arrival, but you choose to be resident in that year. You need to make this choice in writing to the Revenue Commissioners.

    So, on the information you give:

    You were not resident in Ireland in 2018 (unless you chose to be, under test 3).

    You were resident in 2019. You satisfied test 1 and test 2.

    You were resident in 2020. You satisfied test 1 and test 2.

    Whether you will be resident in 2021 depends if and when you leave. If you spent exactly 183 days last year, then you will resident this year (under test 2) if you spend more than 97 days here.

    Ordinary residence kicks in, after you have been resident for three consecutive years, at the start of the fourth year.

    Assuming you did not choose to be resident in Ireland for 2018, you are not “ordinarily resident” here. (If you did choose to be resident in 2018 then you became ordinarily resident on 1 January 2021.)

    If you remain resident for 2021, and are still in Ireland on 1 January 2022, then you will become ordinarily resident on that day. However it sounds as though your plan is to leave Ireland before 31 December 2021.

    So it sounds to me that (assuming you did not choose to be resident in 2018) that you aren’t ordinarily resident, and (if you leave before 31 December 2021) won’t become ordinarily resident. In which case, for 2022 and later years, you will be liable to tax in Ireland only on your Irish-source income and gains. Which I think is the outcome you want.
    beaufoy wrote: »
    at the moment i am just floating an idea...yes nothing has as yet changed but come end of june if i am still here i will have reached the 3 years and things will change and if i wait till then i will have to apply for non residence status if i do go... in nov of this year i qualify for my uk state pension if at said time i have irish residence the pension will be taxed, but index linked. I believe if i have thai residence it will not be taxed however it will not increase every year....swings and roundabouts. I believe also if i am a thai resident i will not be taxed so heavily on my shares
    OK, you might want to double-check one point. It’s the UK authorities who will decide whether your UK pension is index-linked or not. I wouldn’t assume that they defer to the Irish authorities and allow the Irish rules about tax residence to determine whether the UK is going to pay you pension increases or not. They may have their own residence test which they apply for that purpose. So this is something you might want to check directly with the DWP in the UK.


  • #2


    Very good indeed but a few points
    As far as the UK pension is concerned it is index linked if claimed in ireland but does not increase with inflation in Thailand...of course if inflation returns to 5% plus then in real terms my pension if I live in thailand
    My shares are in degiro can I just change my address on my account and have my withdraws paid in Thai Baht then pay the thai tax on cgt with i believe is 10%.
    Oh yes my calculations say i have to leave ireland before end of June, but you say I can stay until december ....are you sure

    Thanks for info so far john


  • #2


    beaufoy wrote: »
    Very good indeed but a few points
    As far as the UK pension is concerned it is index linked if claimed in ireland but does not increase with inflation in Thailand...of course if inflation returns to 5% plus then in real terms my pension will collapse if I live in thailand
    My shares are in degiro can I just change my address on my account and have my withdraws paid in Thai Baht and paid into a thai bank account then pay the thai tax on cgt with i believe is 10%.
    Oh yes my calculations say i have to leave ireland before end of June, but you say I can stay until december ....are you sure

    Thanks for info so far your explanation is very good


  • #2


    beaufoy wrote: »
    beaufoy wrote: »
    Oh yes my calculations say i have to leave ireland before end of June, but you say I can stay until december ....are you sure
    There are two separate issues:

    1. Do you want to avoid being tax-resident in Ireland for the year 2021?

    If so, you must leave before you spend enough days in Ireland to satisfy either test 1 or test 2. This means that you would have to leave before some date which is defintely before 30 June, but there isn't enough information in your post to say what the exact date is. It is possible that the date has already passed (i.e. you are too late to avoid tax residenced for 2021) or that it will pass very soon.

    2. Do you want to avoid becoming ordinarily resident in Ireland for 2021 or 2022 and later years?

    There are two possibilities here:

    A. You elected to be resident in Ireland for the year 2018. In that case, you are already ordinarily resident; you cannot avoid it now.

    B. You didn't elect to be resident in Ireland for 2018. In that case, you are not yet ordinarily resident. You need to leave by 31 December 2021 at the latest to avoid becoming ordinarily resident for 2022 and later years.


  • #2


    thank you


  • #2


    My intention is to sell most of my irish properties just keeping 2or 3 and move back to thailand for the rest of my life ...as i have not spent enough time to qualify for full irish residence can i move back to thailand and straight away regain my status as an off shore/foreign property owner[/QUOTE]

    Just to note that Ireland taxes non residences on gains araising for the sale of property plus Irish Rental income. As such, you will most likely have to pay Irish CGT on the property gains, plus Irish Income Tax and USC on your Irish Rental income even if you are not Irish Resident.


  • #2


    i understand but i hope to achieve a lower tax grab on my state uk pension and my share stock exchange dealings


  • #2


    There is a double taxation treaty between Ireland and Thailand, so irrespect of your tax residence under Irish Tax Law, you may be able to get relief from Irish tax under that treaty. Your Tax domicile will also come into play here.

    You position appears to be far from stright forward, so I would suggest a small investment in some specific professional advice, would be a good investment.


  • #2


    Peregrinus wrote: »
    There’s no such concept in Ireland as “full residence”. There’s residence, and there’s ordinary residence.

    You are tax-resident in Ireland for a given tax year if you satisfy any one of three tests:

    1. You are in Ireland for more than 180 days in that tax year. They don’t have to be consecutive days.

    2. You are in Ireland for more than 280 days in [that tax year + the previous tax year], with at least 30 of those days falling in this tax year and at least 30 falling in the previous year.

    3. You arrive in Ireland in that tax year, and will be resident in the following tax year. You aren’t in Ireland for more than 180 days in the year of arrival, but you choose to be resident in that year. You need to make this choice in writing to the Revenue Commissioners.

    So, on the information you give:

    You were not resident in Ireland in 2018 (unless you chose to be, under test 3).

    You were resident in 2019. You satisfied test 1 and test 2.

    You were resident in 2020. You satisfied test 1 and test 2.

    Whether you will be resident in 2021 depends if and when you leave. If you spent exactly 183 days last year, then you will resident this year (under test 2) if you spend more than 97 days here.

    Ordinary residence kicks in, after you have been resident for three consecutive years, at the start of the fourth year.

    Assuming you did not choose to be resident in Ireland for 2018, you are not “ordinarily resident” here. (If you did choose to be resident in 2018 then you became ordinarily resident on 1 January 2021.)

    If you remain resident for 2021, and are still in Ireland on 1 January 2022, then you will become ordinarily resident on that day. However it sounds as though your plan is to leave Ireland before 31 December 2021.

    So it sounds to me that (assuming you did not choose to be resident in 2018) that you aren’t ordinarily resident, and (if you leave before 31 December 2021) won’t become ordinarily resident. In which case, for 2022 and later years, you will be liable to tax in Ireland only on your Irish-source income and gains. Which I think is the outcome you want.


    OK, you might want to double-check one point. It’s the UK authorities who will decide whether your UK pension is index-linked or not. I wouldn’t assume that they defer to the Irish authorities and allow the Irish rules about tax residence to determine whether the UK is going to pay you pension increases or not. They may have their own residence test which they apply for that purpose. So this is something you might want to check directly with the DWP in the UK.

    Sorry about the delay in answering peregrinus contributions. He obviously is very inteligent and knows the subject in great detail. However, myself and other people calculations disagree with Peregrinus on just one point ie how long do I have to stay in Ireland during 2021 in order to be awarded the unwanted prize of ordinary resident.
    It is taken that 2019 and 2020 have contributed 2 years towards the three years it takes to become an ordinary resident. Now we come to 2021 and a certain scenario. If I leave Ireland in July 2021 then I would have spent more than the 183 year2021 days to achieve ordinary resident status, and therefore if I return to Ireland for just one week in 2022 pre june 2022 then the 2021 residence would be recorded as over 6 month and I would be awarded ordinary residence because of my history of living in ireland for more than 6 months in 2019 2020 2021


  • #2


    Peregrinus wrote: »
    beaufoy wrote: »
    There are two separate issues:

    1. Do you want to avoid being tax-resident in Ireland for the year 2021?

    If so, you must leave before you spend enough days in Ireland to satisfy either test 1 or test 2. This means that you would have to leave before some date which is defintely before 30 June, but there isn't enough information in your post to say what the exact date is. It is possible that the date has already passed (i.e. you are too late to avoid tax residenced for 2021) or that it will pass very soon.

    2. Do you want to avoid becoming ordinarily resident in Ireland for 2021 or 2022 and later years?

    There are two possibilities here:

    A. You elected to be resident in Ireland for the year 2018. In that case, you are already ordinarily resident; you cannot avoid it now.

    B. You didn't elect to be resident in Ireland for 2018. In that case, you are not yet ordinarily resident. You need to leave by 31 December 2021 at the latest to avoid becoming ordinarily resident for 2022 and later years.

    It is option B if I leave dec 30 2021 and just come back in 2022 t meet irish friends (not many) then 2021 will have been calculated as more than half a year of residence


  • #2


    beaufoy wrote: »
    Sorry about the delay in answering peregrinus contributions. He obviously is very inteligent and knows the subject in great detail. However, myself and other people calculations disagree with Peregrinus on just one point ie how long do I have to stay in Ireland during 2021 in order to be awarded the unwanted prize of ordinary resident.
    It is taken that 2019 and 2020 have contributed 2 years towards the three years it takes to become an ordinary resident. Now we come to 2021 and a certain scenario. If I leave Ireland in July 2021 then I would have spent more than the 183 year2021 days to achieve ordinary resident status, and therefore if I return to Ireland for just one week in 2022 pre june 2022 then the 2021 residence would be recorded as over 6 month and I would be awarded ordinary residence because of my history of living in ireland for more than 6 months in 2019 2020 2021
    Actually, I think we're both wrong.

    The correct position is that, if you are tax-resident in Ireland for 2109, 2020 and 2021, then you will be ordinarily resident for 2022 no matter what you do in 2020, even if you don't enter Ireland at all during that year.

    The result will be that in 2022 you will be ordinarily resident in Ireland, but not resident.

    You are taxed as if you are resident, except that:

    - You pay no Irish tax on income from an employment, trade, profession, provided it is carried on wholly outside the state;

    - You can earn up to €3,810 of other income from a non-Irish source, and pay no Irish tax on that. (But if you earn more than €3,810, you pay Irish tax on the whole amount, not just on the excess over €3,810.)

    Otherwise, you're liable to Irish income tax. But you will almost certainly be resident in some other country, and if there is a double taxation agreement between Ireland and that country, and your income is liable to tax in the country where you reside, the double taxation agreement may provide relief from Irish tax.

    This situation will continue for each year after 2022 until you cease to be ordinarily resident in Ireland.


  • #2


    Peregrinus wrote: »
    Actually, I think we're both wrong.

    The correct position is that, if you are tax-resident in Ireland for 2109, 2020 and 2021, then you will be ordinarily resident for 2022 no matter what you do in 2020, even if you don't enter Ireland at all during that year.

    The result will be that in 2022 you will be ordinarily resident in Ireland, but not resident.

    You are taxed as if you are resident, except that:

    - You pay no Irish tax on income from an employment, trade, profession, provided it is carried on wholly outside the state;

    - You can earn up to €3,810 of other income from a non-Irish source, and pay no Irish tax on that. (But if you earn more than €3,810, you pay Irish tax on the whole amount, not just on the excess over €3,810.)


    Otherwise, you're liable to Irish income tax. But you will almost certainly be resident in some other country, and if there is a double taxation agreement between Ireland and that country, and your income is liable to tax in the country where you reside, the double taxation agreement may provide relief from Irish tax.

    This situation will continue for each year after 2022 until you cease to be ordinarily resident in Ireland.

    It would seem that I will not be able to escape this country until Sept and said date depends on covid calming down, and for 3 years after said date I can expect to pay some extra tax to revenue ie. Now in Nov I qualify for UK pension and I suspect I will ask for said pension to be paid into my thailand bank account and thailand will want their 10% and Ireland will want their 20%...so who do I have to pay?? Concerning the 3810 I am allowed to earn from non irish source this might be useful as i sometimes earn/win money on the stock market but irelands 33% CGT makes the win not worth achieving so from what you say i can get the 2000 cgt ireland allowance on shares bought in ireland and 3810 euro allowance on shares I buy in Thailand leaving only the very reasonable 10% thailand CGT at source to pay
    PS Will my Irish tax credits be safe
    PPS I assume if we get out before the end of June we can escape the Irish ordinary resident tax liabilities


  • #2


    beaufoy wrote: »
    It would seem that I will not be able to escape this country until Sept and said date depends on covid calming down, and for 3 years after said date I can expect to pay some extra tax to revenue ie. Now in Nov I qualify for UK pension and I suspect I will ask for said pension to be paid into my thailand bank account and thailand will want their 10% and Ireland will want their 20%...so who do I have to pay?? Concerning the 3810 I am allowed to earn from non irish source this might be useful as i sometimes earn/win money on the stock market but irelands 33% CGT makes the win not worth achieving so from what you say i can get the 2000 cgt ireland allowance on shares bought in ireland and 3810 euro allowance on shares I buy in Thailand leaving only the very reasonable 10% thailand CGT at source to pay
    PS Will my Irish tax credits be safe
    PPS I assume if we get out before the end of June we can escape the Irish ordinary resident tax liabilities

    You have asked a lot of questions here all related to the same matter and there is a solution for you to not pay Irish tax on foreign incomes but honestly you should get a tax advisor to go through it, but if you must google the "remittance basis".


  • #2


    Peregrinus wrote: »
    Actually, I think we're both wrong.

    The correct position is that, if you are tax-resident in Ireland for 2109, 2020 and 2021, then you will be ordinarily resident for 2022 no matter what you do in 2020, even if you don't enter Ireland at all during that year.

    The result will be that in 2022 you will be ordinarily resident in Ireland, but not resident.

    You are taxed as if you are resident, except that:

    - You pay no Irish tax on income from an employment, trade, profession, provided it is carried on wholly outside the state;

    - You can earn up to €3,810 of other income from a non-Irish source, and pay no Irish tax on that. (But if you earn more than €3,810, you pay Irish tax on the whole amount, not just on the excess over €3,810.)

    Otherwise, you're liable to Irish income tax. But you will almost certainly be resident in some other country, and if there is a double taxation agreement between Ireland and that country, and your income is liable to tax in the country where you reside, the double taxation agreement may provide relief from Irish tax.

    This situation will continue for each year after 2022 until you cease to be ordinarily resident in Ireland.

    Peregrinus, it’s worth noting also that Beaufoy’s connection with Ireland is limited to residence here for a short number of years meaning that he is unlikely to have an Irish domicile. Consequently, while he might be ordinarily resident here for a period subsequent to his residence here, that will effectively be a dead letter unless he remits something of his foreign non-employment income here irrespective of any treaty relief. Based on the facts as presented, I doubt that, absent foolish actions, that Beaufoy will have any Irish income tax liability post his departure.


  • #2


    It would seem that I will be stuck here until after june so I will achieve the residence label I do not wish to have. However I have been pointed in the direction of a new plan, which should make life easier and with as little tax as non residence would achieve. I am at present 65 years old and I was planning to sell a few more properties take the money to Thailand and purchase condos in my wife's name (I am not allowed to work in Thailand)and rent them out. This would leave us with a joint income of 30,000, plus pension =40,000 and my wife would have to apply for double taxation and my earnings would be 100% irish so we would have to make seperate irish returns. On the understanding that 20,000 of the joint income would be coming from Ireland and we (or maybe just me) would keep my tax credits very little tax would be owed, plus PRSI would go way when after leaving Ireland.
    My new plan involves a lot less work for me and would be better for revenue ie, provided there are no hurdles (you tell me) As a 65 year old I qualify for Marginal relief, and said system would seem to be best for my income bracket. Now if I ran away from Ireland and ran the plan as above then tax liabilites in Ireland and thailand would add up to about 2000euro pa. However, on the understanding that I still intend to move to Thailand and become a non resident LL. My new plan is to keep my irish properties apart from the one already sold (money used to buy a house in Thailand) and use marginal relief to cut down my irish tax liabilities. By way of keeping all irish property my earnings would be 32000 plus 10000 uk pension according to my calculations I would get 36000 allowance so 6 0000 would be taxable @ 40% so this means 2400 tax and no prsi because I will be 66 years old.....am i correct???


  • #2


    davindub wrote: »
    You have asked a lot of questions here all related to the same matter and there is a solution for you to not pay Irish tax on foreign incomes but honestly you should get a tax advisor to go through it, but if you must google the "remittance basis".

    I think this is the best advice.


  • #2


    I think this is the best advice.

    remitance basis will not work for me my intention is to make a few thousand by way of stock market and maybe renting out a condo. Remittance basis would mean I would lose my tax credits which are much more than the tax saved by remittance basis....I have contacted a few (4-5) and once they have my details they are not interested. I suspect it is because small a mounts of money are involved a not a small amount of work ie they know they can only save me about a thousand and they also know it would be difficult to charge me several hundred euro just to save 1000 in tax. One money advisor told me I seem to have a grasp on tax system in Ireland so I did not need his help


  • #2


    My advice: Go pay a professional tax advisor a good fee for good advice.

    Good advice will cost good money. If you come across as unwilling to pay, then you will get the reaction you received.
    Your answers won’t be found on an Internet forum.


  • #2


    Also there is one point to note.

    There is provision for discretion in the 180 days / 280 days definitions. For example if you were are 175 days and a blizzard grounded all flights, or you fell sick, and were *forced* to stay in ireland more than 180 days due to no fault of your own, you can get and exception from the otherwise hard-and-fast rule.

    The very interesting question is whether the closure of borders - here or abroad - could be grounds for trying to avail of this discretion (you seem to suggest you would leave if you could, but cannot).

    Bottom line: get a tax advisor. And don't choose them based on price.


  • #2


    relevanc wrote: »
    My advice: Go pay a professional tax advisor a good fee for good advice.

    Good advice will cost good money. If you come across as unwilling to pay, then you will get the reaction you received.
    Your answers won’t be found on an Internet forum.

    a good financial advisor would advise me not to pay 700 euro fee if he is only saving 1000 in tax


  • #2


    beaufoy wrote: »
    a good financial advisor would advise me not to pay 700 euro fee if he is only saving 1000 in tax

    Assuming you don't know how to save the 1000 in tax yourself, then it sounds like a good deal, no?


  • #2


    3DataModem wrote: »
    Assuming you don't know how to save the 1000 in tax yourself, then it sounds like a good deal, no?

    Working running a large business most executives (coca cola numbers not mine) expect to spend 20% to people who can save them money or enrich them. Some advertisers in the past have suggested that an outlay of 1000 euro should not be expected to bring in 5000 euro in revenue. In fact thomson local pages have in the past suggested the same as you ie if a self employed engineer spends 1000 with them and the advert only brings in 1300 then the engineer is still 300 euro better off than he would be if he did not spend the 1000 on the advert....However Thompson forgot to calculate that anyone who spends 1000 in order to save 700 in tax does not deserve to be in charge of a business, and probably has mental health problems. So taking into account the medication and money spent seeing a mental illness doctor the self employed engineer would lose the 300 euro he saved by seeing a tax expert.
    The problems with being too generous to a tax advisor will not stop with the mental health hospital. If revenue do an audit they will use the 20% calculating point. So if an engineer claims he spent 100,000 on adverts and said adverts only brought in 130000 in work the revenue will use the 20% calculation and accuse the engineer of either lying or being mental.


  • #2


    beaufoy wrote: »
    a good financial advisor would advise me not to pay 700 euro fee if he is only saving 1000 in tax

    No one mentioned a financial advisor other than you! You need a tax advisor and they are only interested in tax compliance and tax advice.

    How that relates to your example of advertising is beyond me!!!
    You have a legal obligation to be tax compliance in whatever jurisdictions you live/trade. So no resemblance to advertising, possibly closer to insurance.
    And I highly doubt you’d even get a meeting with one for €700


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