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SSIA Residency Question

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  • 11-01-2006 11:18am
    #1
    federbanger
    Closed Accounts Posts: 5 ✭


    I have a question to ask about the SSIAs that I have not been able to get an answer for no matter who I have asked. Any help would be greatly appreciated to say the least!!


    Left Ireland in November 2003 (with the SSIA being opened in 2002) to travel and been away since then. Full-time employment since April of 2004 in Australia so that is just a bit shy of two years in full-time employment over there (though did come back to Ireland for a month). This looks very obvious that I am inegilible for residency at the moment though am not sure that I would be able to make it up if I came home early to see out the remaining time left on the SSIA?

    My main question is if I am deemed inegilible then what happens and how am I penalised? I have kept up my payments on the SSIA while abroad whether that is legal or not, I don't know. I heard a rumour that there is an 80% tax on the interest (instead of the 23% DIRT Tax) but was unsure whether the 25% you get from the Government was effected. As stated previously, any help would be greatly appreciated.


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    #2
    BrianD
    Closed Accounts Posts: 7,221 ✭✭✭BrianD


    Strictly speaking you have invalidated the SSIA and are not eligible for the scheme. The condition is that you must be ordinarily resident in the RoI for the duration of the scheme. When the SSIA matures you have to sign a declaration to the Revenue that will ask you to verify that it's yours and that you have abided by the rules.

    I am sure there are plenty of people in the same boat. Strictly speaking you would be making a false declaration so it's up to you! Who knows what spot checks the revenue will be making. Perhaps they will look at PAYE records etc. It's also going to be election year so I'm sure there will be plenty of impetus to make sure everyone gets their rewards. At the very least, I would make sure you post your declaration in Ireland!


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    #3
    Redmon
    Closed Accounts Posts: 27 ✭Redmon


    Great point. I have got 18 months on my SSIA and it looks like I will be leaving the country to work abroad for 2 years in February of this year. I too have been trying to extract information from my provider (EBS) but to no avail.

    I am wary of invalidating my SSIA so I am contemplating ceasing my contributions. Instead, I hope to invest a lump sum into a PRSA and back date it.

    If anyone has any information - or any idea where I can get information - on this topic, can they please post?


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    #4
    federbanger
    Closed Accounts Posts: 5 ✭federbanger


    It sounds like you are saying that if you are deemed ineligible then you get nothing, no 25% or interest. Do you know that as a fact Brian D or is it speculation. Obviously if it is true then I am right up the creek without the paddle!!

    Personally speaking, I was always wondering how they would know if were in the country for all of it. I am sure though they would not let someone putting in a large amount to get away without a check if they had not made a tax return in three years!!


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    #5
    NaasMan
    Closed Accounts Posts: 24 ✭NaasMan


    The main issue here is the residence requirement. If you left Ireland in November 2003 you are tax resident in that year (assuming that you lived in Ireland full time for at lease three years up to that point), and tax ordinarily resident for 2004, 2005 and 2006. As such if your SSIA matures prior to 31 December 2006 you would be ok. But as it matures post 31 December 2006 you have a problem.


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    #6
    federbanger
    Closed Accounts Posts: 5 ✭federbanger


    It is post December 31 2006 that my SSIA mature so as you say yourself, I have a problem and was wondering what are the penalties for that?

    Does everything get taken back even the 25% or do you even get penalised with some of the money you put into the scheme? Any help would be greatly appreciated in answering these questions!


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    #7
    Pythia
    Registered Users Posts: 7,469 ✭✭✭Pythia


    Are you planning on coming back for >183 days this year?


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    #8
    cgf
    Closed Accounts Posts: 545 ✭✭✭cgf


    Have a look at this

    http://www.revenue.ie/doc/upssia9.doc


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    #9
    federbanger
    Closed Accounts Posts: 5 ✭federbanger


    Pythia wrote:
    Are you planning on coming back for >183 days this year?

    No that is unlikely as would have to leave my job and move all my stuff back. I suppose in the immediate year or two yes but not in the next few months.


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    #10
    r3nu4l
    Registered Users Posts: 17,399 ✭✭✭✭r3nu4l


    I phone d revenue with this query relating to myself:

    I left Ireland in August 2004 so was tax resident for that year,
    I was ordinarily resident in 2005 and will also be for 2006 and until 31December 2007. Is that correct?

    Their answer: Yes.

    My SSIA scheme matures in April 2007, am I still eligible?
    Their answer: Yes you are still eligible.

    They did not ask me for my name or any of my details so you should be able to phone them and find out without any hassle. The woman I spoke to was also quite friendly which makes a change from the last time I phoned Revenue!

    That said, I won't believe I'm safe until the account has matured and I have the money in the bank but I would suggest you phone them.


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    #11
    federbanger
    Closed Accounts Posts: 5 ✭federbanger


    Thanks for your help with regards your situation but I accept that I am inegilible as I left in 2003 and it matures in 2007. I am sort a few months for egiliblity.

    Why question still stands, what it the punishment for that? No one seems to know as cannot find any examples on the Revenue Commissioners site either!


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    #12
    nihe001
    Registered Users Posts: 5 ✭nihe001


    federbanger wrote:
    Thanks for your help with regards your situation but I accept that I am inegilible as I left in 2003 and it matures in 2007. I am sort a few months for egiliblity.

    Why question still stands, what it the punishment for that? No one seems to know as cannot find any examples on the Revenue Commissioners site either!
    at the moment you become non ordinarily resident the account ceases to be a special savings incentive account.the first "punishment" is that any lodgements to the account after that date do not qualify for the government top-up.the second (and main) punishment is that the entire value of the fund at that date is taxed at 23%. unless of course you keep your head down and get away with it...

    incase you're interested the legal basis for the above is Sections 848H and 848K of the Taxes Consolidation Act 1997


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    #13
    Victor
    Registered Users Posts: 78,371 ✭✭✭✭Victor


    Part of the structure of the SSIA scheme is that it is an income tax rebate scheme (albeit everyone can avail of it, even if their income tax was nil). The payments into the scheme are deducted from gross income tax receipts and are not government expenditure.

    I suspect you will have to make income tax declarations and that is how you will be caught be the Revenue.


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    #14
    nihe001
    Registered Users Posts: 5 ✭nihe001


    no, its actually the bank who are obliged to withhold the 23% from you and pay it over to the Revenue.

    It remains to be seen whether the 2006 income tax return will separately ask people to declare any details re their SSIA however the vast majority of people are not obliged to submit an income tax return anyway


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