The Gazette 1994

GAZETTE

APRIL 1994

residence in Ireland will not in itself

make a person liable to Irish tax.

There must be six months residence in

a year of assessment.

Secondly, if an individual has a place

of abode in Ireland and visits here for

whatever period of time, that

individual may be deemed to be

resident here. There is a relief for Irish

citizens working abroad under section

76 ITA, 1967. If an Irish citizen is

working abroad for a full tax year

engaged in a full time trade,

profession or employment, no part of

which is carried on within Ireland and

no duties are performed in Ireland,

Irish tax will only be charged on UK

and Irish income and only such

"foreign income" as is remitted to

Ireland. The Revenue takes the view

that if work is done in Ireland of

similar importance to work done

abroad, the individual will be treated

as resident here. The provisions of

section 4, Finance Act, 1987 secure

that for the tax years 1987/88 onwards

the place of abode test will not be

applied to an individual with Irish

domicile

(note

domicile not

citizenship) who is engaged in a full

time trade or profession carried on

exclusively outside the State or in the

exercise of the duties of an office or

employment abroad. Accordingly, an

individual who fulfils these conditions

who would have been liable on UK

income solely due to the place of

abode test, will no longer be so liable.

Thirdly, an individual who visits

Ireland habitually for three months or

more over a number of tax years (in

practice four years) will be treated as

resident here even if that individual's

employment and sole residence is

abroad.

Fourthly, if an individual comes to

Ireland with the intention of

permanently residing here, but has

been in Ireland for less than six

months in any tax year, and has no

fixed place of abode, the Revenue will

nevertheless - unless the individual is

coming from the UK - treat them as

resident here from the date of arrival.

In practice there is a ten day

allowance so that an individual

arriving in Ireland on April 1, 1994

would not be treated as resident here

for the tax year 1993/94. If an

individual is arriving from the UK, the

six months residence in a year of

assessment is necessary for an Irish

tax liability to arise.

Ordinary Residence

There is no definition of "ordinary

residence" in the tax Acts. It can be

described as that an individual shall be

deemed to be ordinarily resident in a

country where an individual spends a

considerable time. Lord Buckmaster

stated "ordinary residence means in my

opinion no more than that the residence

is not casual and uncertain, but the

person held to reside does so in the

ordinary course of life."

Lord Viscount

stated that "the expression ordinary

residence connotes residence in a place

with some degree of continuity and

apart from temporary absences."

An individual who leaves Ireland for

employment purposes, with the

intention of returning and is absent for

a full tax year will while non-resident

for the year of assessment be regarded

as ordinarily resident and therefore,

strictly speaking, liable for tax on

worldwide income and gains. The

Revenue have accepted in practice

that the measure of income chargeable

in Ireland in respect of such earnings

from an employment exercised wholly

outside the State will be confined to

the income remitted to, or brought

into, or received in the State.

Tax Treatments

Income Tax

(a) Resident and Domiciled

An individual resident and

domiciled in Ireland is liable on

worldwide income". Section 76,

sub-section 2, Income Tax Act,

1967 is a relieving section

whereby an Irish citizen not

ordinarily resident is liable only

on income arising in Ireland and

the UK and on foreign income

only to the extent it is remitted to

Ireland. Part III, Schedule 6,

Income Tax Act, 1967 excludes

income arising from UK sources.

(b) Resident but not Domiciled

Liable on Irish source income, UK

and foreign income, subject to the

exemption in section 76, sub-

section 2, Income Tax Act, 1967.

(c)

Non-Resident

Liable only on Irish source

income

. However, an Irish

citizen resident abroad due to

health reasons relating to

themselves or a family member or

entitled under a double taxation

treaty to the same personal

allowance and reliefs as an Irish

citizen not resident in the State

may claim such relief

Capital Gains Tax

(a)

Resident and Ordinarily

Resident

and Domiciled:

Worldwide gains.

(b)

Resident or Ordinarily

Resident

but not Domiciled:

Irish and UK

gains and such worldwide gains

as are remitted to Ireland.

(c)

Non-Resident:

Liable only on

;

disposal of certain assets as

defined by Capital Gains Tax Act,

1975.

Capital Acquisitions Tax

I Under the original rules the entire

property devised under a gift or

inheritance was taxable if:-

(a) the disponer died domiciled in the

State, or

(b) the proper law of disposition was

the State

This was amended by the Finance Act,

1993

in that point (b) no longer is

| applicable where a gift or inheritance

| is taken after June 17, 1993, except a

gift or inheritance taken under a

discretionary trust. Accordingly, a gift

or inheritance taken by virtue of a

disposition set up under Irish law by a

l then foreign domiciled person of

foreign assets will no longer be liable

to Irish CAT.

! Probate Tax

(a) Domiciled, Resident or Ordinarily

Resident

Worldwide assets are liable.

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