who to pay tax to on stock in other countries

Bytheway

Who do I have to pay tax to if I make a profit in stocks in another counrty? If I invest in the london stock exchange, do i pay tax to the english government or the Irish government?

barneystinson

Well, thats a very ambiguous question; are you talking about "profits" as income, or as capital gains arising from the sale of some or all of your investment? Investment income (eg. dividends, interest earned etc..) will be subject to income tax, and capital gains are subject to capital gains tax.

Where and how you are subject to these taxes depends in the first instance on your residence, ordinary residence and domicile - plenty of info available on the Revenue website.

Assuming you're an Irish individual, resident in Ireland in the tax year in question, then you are liable to Irish tax on all of your income tax and capital gains, wherever they may arise.

Depending on what type of foreign sourced income/gains you have had, you may have suffered tax deductions (eg. withholding taxes) in that other country. When you submit your Irish tax return you would generally be entitled to a credit against your Irish tax, for the foreign tax suffered (this depends on what country you earned your foreign income in, and whether a Double Taxation Treaty exists between Ireland and that country). Alternatively you may be able to apply to the foreign country's Revenue for a repayment of the withholding tax, depending on their rules.

Then again, if you're going to ask a general question, you can only expect a general answer...

Bytheway

Thanks barneystinson for all that info.
I'm an Irish resident. I wondering about the tax on the money made on shares bought in the London stock exchange in England.

1) In Ireland there seems to be a 25% CGT rate.
Can I deduct losses from gain to limit tax liability ?

2)With Double taxation laws, would I still have to pay tax in England.

The higher CGT rate in England is 28%, would I have to pay the difference of 3% to the English government?

barneystinson

2.) No, you will not have any uk liability unless you are/were resident there.

1.) Yes, you need to calculate the loss / gain on each individual share disposal in the tax year. You then submit your liability by completing the relevant panels on a form11 if self employed, or if you are a paye worker you can submit a form cg1. You disclose your total gains as well as losses separately, and end up with a net taxable gain.

Have a look on the revenue.ie website, it's explained pretty well on there...