Capital Gains tax-Crypto?

Bob24

Peregrinus wrote: »

The thing is, France could also unilaterally change its laws so as to allow a full credit for foreign tax, and that would be just as effective to avoid double taxation. Why would we expect Ireland, rather than France, to take this step?

It is Ireland which is taking the unconventional step of taxing someone who is legally a tax resident elsewhere and not applying any tax credit to avoid double taxation (if I am not mistaken, even if you take the controversial US policy of charging a global income tax to its citizens regardless of country of residence, there is credit given for tax already paid in the country of residence).

There is absolutely no reason for any country to forfeit tax owed by its own residents to facilitate a foreign government taxing those people. Ireland wouldn't entertain it if the situation was reversed, and rightly so.

Bob24

fbradyirl wrote: »

Does Koinly give a good enough output
to enable all Revenue forms to be filled easily at the end of the year ? I obviously cannot determine that without paying the fee.

Yes. There is a summary sheet with the amount of CGT and income tax to declare.

And then a long report with the detail of the transactions and calculations to come to that figure.

If you have a DEGIRO account, it is somewhat similar to the tax reports provided by DEGIRO.

Peregrinus

Bob24 wrote: »

It is Ireland which is taking the unconventional step of taxing someone who is legally a tax resident elsewhere and not applying a tax credit for to avoid double taxation (if I am not mistaken, even the infamous US policy of charging a global income tax to its citizens includes a credit for tax already paid in the country of residence).

There is absolutely no reason for any country to forfeit tax owed by its own residents to facilitate a foreign government taxing those people. Ireland wouldn't do it either if the situation was reversed, and rightly so.

No, Ireland is not unusual. Most countries base liability to tax on (among other things) some concept of residence, but different countries employ different concepts of "residence" and have different definitions for them, and it's not at all unusual for internationally mobile people to find that they have some form of tax residence, and therefore some tax liability, in two (or more) countries at the same time. And as already stated one country is unlikely to defer unilaterally to the other in that situation. If country A thinks you have a sufficient connection with them for them to tax you, they are not going to defer to country B just because country B also thinks that you have a sufficient connection with them to tax you. They will seek a reciprocal arrangement to cover these matters. This is a large part of the reason why double taxation agreement exist.

You are right to point out that the US gives a full credit to its non-resident citizens who are taxed in their country of residence, but this just underlines the point. Under US law, to get the credit, you have to not have tax residence in the US. If you're a tax resident of the US and of another country (which is not uncommon) then you don't get the full credit unless there is a DTA providing it.

Bob24

Peregrinus wrote: »

No, Ireland is not unusual. Most countries base liability to tax on (among other things) some concept of residence, but different countries employ different concepts of "residence" and have different definitions for them, and it's not at all unusual for internationally mobile people to find that they have some form of tax residence, and therefore some tax liability, in two (or more) countries at the same time. And as already stated one country is unlikely to defer unilaterally to the other in that situation. If country A thinks you have a sufficient connection with them for them to tax you, they are not going to defer to country B just because country B also thinks that you have a sufficient connection with them to tax you. They will seek a reciprocal arrangement to cover these matters. This is a large part of the reason why double taxation agreement exist.

You are right to point out that the US gives a full credit to its non-resident citizens who are taxed in their country of residence, but this just underlines the point. Under US law, to get the credit, you have to not have tax residence in the US. If you're a tax resident of the US and of another country (which is not uncommon) then you don't get the full credit unless there is a DTA providing it.

It is usually done when the taxable events relate to assets or income located in the country which is taxing it. For example you own property in country A and sell it while being a resident of country B; sure country A might apply some tax on the transaction. Same if you have income originating in country A (for example dividends).

But for country A to tax you and not offer any credit while you are a legally resident and tax resident in country B, related to assets and income which have nothing to do with country A? No I wouldn't call it usual.

Mellor

Bob24 wrote: »

As I said, the order is just a detail anyway and the real matter is double taxation, but here is where you suggested that order:

Nothing about that suggests that it only applies in that order. I was point out that 33% and 30% compound to 53% not 63% like you said.
I also said that it’s 53 no matter which comes first, implying either order.

I don’t think there’s anything contentious that needs to be tested in court. It’s pretty clear that the reduction applies. The DTA applying is different. I guess don’t move to France to reduce your tax bill just yet.

Peregrinus

Bob24 wrote: »

It is usually done when the taxable events relate to assets or income located in the country which is taxing it. For example you own property in country A and sell it while being a resident of country B; sure country A might apply some tax on the transaction. Same if you have income originating in country A (for example dividends).

For income/gains from assets that have a definite location like land, yes, the country where the asset is located will tax you and the country where you are resident (if different) will usually allow that as a deduction but, in the absence of a tax treaty, not necessarily as a full credit.

Bob24 wrote: »

But for country A to tax you and not offer any credit while you are a legally resident and tax resident in country B, related to assets and income which have nothing to do with country A? No I wouldn't call it usual.

Different story for income/gains from assets which have no particular location (like shares). In general, in the absence of a tax treat Country A doesn't care at all whether you are legally resident/resident for tax purposes in Country B, doesn't want to form a view about that and doesn't want to make your liablity to tax in country A dependent at all on your tax residence in country B, a matter which is entirely within the control of country B. You'll notice that the Irish legislation, already quoted, giving you a deduction for foreign tax paid doesn't depend at all on whether you are tax-resident in the foreign country concerned, and that's typical. All that matters is that you had to pay tax there. Why you had to pay tax there is irrelevant.

So, no, unless there's a tax treaty providing for this, most countries don't give their residents a full tax credit for tax paid in a different country, if they are also resident there. Whatever treatment they offer in this situation will not depend at all on tax residence in the other country. Countries are not inclined to "subordinate" their own tax residence rules to another countries rules, except under an agreed reciprocal arrangement.

Bob24

Peregrinus wrote: »

Different story for income/gains from assets which have no particular location (like shares). In general, in the absence of a tax treat Country A doesn't care at all whether you are legally resident/resident for tax purposes in Country B, doesn't want to form a view about that and doesn't want to make your liablity to tax in country A dependent at all on your tax residence in country B, a matter which is entirely within the control of country B. You'll notice that the Irish legislation, already quoted, giving you a deduction for foreign tax paid doesn't depend at all on whether you are tax-resident in the foreign country concerned, and that's typical. All that matters is that you had to pay tax there. Why you had to pay tax there is irrelevant.

So, no, unless there's a tax treaty providing for this, most countries don't give their residents a full tax credit for tax paid in a different country, if they are also resident there. Whatever treatment they offer in this situation will not depend at all on tax residence in the other country. Countries are not inclined to "subordinate" their own tax residence rules to another countries rules, except under an agreed reciprocal arrangement.

A deduction isn't a tax credit though. All they are doing is allowing foreign tax a an expense which reduces the disposal value to some extend - but clearly it isn’t a tax credit. A proper tax credit would be to credit the tax amount paid abroad against Irish tax liabilities (I.e. if you have a 33% liability in Ireland and have already paid 30% abroad, you are only paying 3% to Ireland).

Also, the basis for this discussion is whether the 3 years rule is genuinely a way to punish tax tourism (a goal I would agree with). Here clearly it isn’t because it is actually punishing people who are moving to a place which isn’t a tax heaven by double taxing them (I.e. if someone is to move abroad, the rule is actually giving an incentive to move to a tax heaven so that at least they are only taxed once). While of course it is legal and the government can do it, it is something I find morally quite reprehensible (and why I don’t find it quite honest for anyone to claim the goal of this rule is to punish tax tourism).

Would you have a couple of examples of other Western countries which are similarly taxing non-residents of the taxing country for gains made on assets not located in the taxing country, and without giving a tax credit for for tax already paid in the person's country of residence? (which is what Ireland is doing here)

You are saying it is not unusual, there must be a few obvious ones you have in mind? (I have an open mind on this and will change my mind if proven wrong, but this would require some specifics of what we are talking about)

Peregrinus

Bob24 wrote: »

A deduction isn't a tax credit though. All they are doing is allowing foreign tax a an expense which reduces your liability a bit - but clearly it isn’t a tax credit.

Yes. That's the point. Tax deduction is the standard treatment where there's no tax treaty, and it's much less beneficial than tax credit.

Bob24 wrote: »

Also, the basis of this discussion is whether the 3 years rule is genuinely a way to punish tax tourism (a goal I would agree with). Here clearly it isn’t because it is actually punishing people who are moving to a place which isn’t a tax heaven by double taxing them (I.e. if someone is to move, the rule is actually giving an incentive to move to a tax even so that at least you are only taxed once).

It's not, and so far as I know never has been, an attempt to punish tax tourism. It's simply based on the view that where a gain has accrued over time during a period of residence in Ireland, Ireland shouldn't lose the associated revenue simply because someone leaves the country shortly before realising the gain. It doesn't matter whether they have left the country to go to a tax haven, or to avoid Irish tax, or for any other reason. What matters is that they were resident here while the gain accrued.

Bob24 wrote: »

Do you have a couple of examples of other Western countries which are similarly taxing non-residents for gains made on assets not located in the taxing country, and without giving a full tax credit for for tax already paid in the person's country of residence rated to those gains? (which is what Ireland is doing here)

You are saying it is not unusual, there must be a few obvious ones you have in mind to make that statement?

They pretty much all do this, to some extent. The concept of "residence" for tax purposes tends to include some people who have already ceased to reside in the country concerned. All countries have their own definitions of tax residence, and these often overlap, so it's easy to be tax resident in two countries at once, at least for a transitional period.

That's why the standard OECD tax treaty contains a provision providing relief for this very situation - people within the charge to tax in two countries, primarily because the satisfy the residence tests applied by both. If the problem wasn't a common one, the OECD model DTA wouldn't address it.

And I don't know of any country whose law says, in effect, "You are tax resident here if you satisfy X condition, unless you are also tax resident in some other country [which we don't regard as a tax haven], in which event you are not tax resident here" ( or " . . . you are taxed as if you aren't tax-resident here"). Which is effectively the solution you are suggesting for Ireland. That would be unusual.

Ireland is perhaps out of line in having a particularly "clingy" concept of "ordinary residence", which is the basis of the charge to CGT. You can be ordinarily resident in Ireland for several years after you have, in reality, left. The result is that the period of overlap with tax-residence in another country can be quite long. As between most other countries, it rarely lasts more than a year, and often less. But the problems that result from this are partly alleviated by the fact that Ireland has quite a wide network of DTAs, most of which provide a full credit for foreign CGT. You're unfortunate in that your particular interest is in France, with whom we have a very old DTA that doesn't cover CGT.

Mellor

Bob24 wrote: »

A deduction isn't a tax credit though. All they are doing is allowing foreign tax a an expense which reduces the disposal value to some extend - but clearly it isn’t a tax credit. A proper tax credit would be to credit the tax amount paid abroad against Irish tax liabilities
[/B]

And that is what happens in countries where the DTA includes CGT. Which is most countries.

Here clearly it isn’t because it is actually punishing people who are moving to a place which isn’t a tax heaven by double taxing them

Not really. As there are no laws that actively try to double tax people.
The situation where it happens, such as France, exist because there is not law preventing it - by reason of it predating existence of CGT.

Mellor

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-02/02-03-01.pdf

Section 29(4) provides in general that an individual who is resident or
ordinarily resident but not domiciled in the State is also chargeable to CGT on
gains from disposals of assets situated outside the State, but only to the
extent that those gains are received in the State. This treatment is known as
the remittance basis of assessment.

Section 29(5) provides rules as to what amounts are to be regarded as
received in the State for the purposes of Section 29(4) – essentially all
amounts paid, used or enjoyed in any manner or form transmitted or brought
into the State are treated as received in the State

Peregrinus

Yes. But an Irish person who emigrates will ordinarily continue to be domiciled in Ireland for many years, and certainly for the three years during which they continue to be ordinarily resident. The remittance basis mainly applies to non-Irish people who come to live in Ireland temporarily — posted workers, expat executives of multinationals, that kind of person — because they don't have Irish domicile when they arrive, and generally don't acquire it while here.

Mellor

Peregrinus wrote: »

Yes. But an Irish person who emigrates will ordinarily continue to be domiciled in Ireland for many years, and certainly for the three years during which they continue to be ordinarily resident.

I understand that domicile is a much more permanent concept than residence. But I can see what basis you continue to be domiciled for many years after emigrating.

https://www.citizensinformation.ie/en/money_and_tax/tax/moving_country_and_taxation/tax_residence_and_domicile_in_ireland.html

Your domicile is the country where you live with the intention of remaining there permanently. It may be different to your residence or nationality.

This domicile can be changed to a domicile of choice, if you move to a different country with the intention of living there permanently.

That seems pretty clear to me.
If you permanently leave Ireland, you cease being domiciled in Ireland as soon as you leave. You continue to be ordinarily resident. 29(4) should apply.

Obviously, if you left for a number of years on work visa. You could be continue to domiciled and ordinarily resident fir 3 years, and domiciled only thereafter.

Peregrinus

You need to build up concrete evidence of your intention to settle permanently in another country - so, buy a house there, sell your property in Ireland, satisfy any local requirements to obtain permanent resident status in that country, establish a social network there, make a will according to the laws of that country, buy yourself a grave-plot there, that kind of thing.

OK, I maybe exaggerate, but only slightly. The point is that domicile is "sticky"; it's not easy to lose your domicile of origin and acquire a domicile of choice. It certainly requires more than a stated intention to remain permanently in the country you have moved to. Among the things that you will likely do to change your domicile is disposing of property and assets in the country you have left. And that, of course, may realise the very capital gains that you don't want to realise until after the Revenue have accepted that you have changed your domicile.

If you're in a position to defer realising your gains, then waiting until you cease to be ordinarily resident provides a clearer and more certain outcome than waiting until the Revenue confirm your non-domiciled status. And if you're not in a position to defer realising your gains, then you're probably not in a position to wait until you have confirmation of your non-domiciled status either.

Mellor

Peregrinus wrote: »

You need to build up concrete evidence of your intention to settle permanently in another country - so, buy a house there, sell your property in Ireland, satisfy any local requirements to obtain permanent resident status in that country, establish a social network there, make a will according to the laws of that country, buy yourself a grave-plot there, that kind of thing.

Buy a house? Nope. Renting long term or even permanantly is valid.
Sell property in Ireland. I see the logic. But it's perfect valid to have overseas investment property.
Grave plot? Hmmm, I don't think any one my age has a plot.
Social network. Subjective.

Permanent residence. That one I agree with. But that's what migration is.
Using Australia as the obvious example. A permanent residence visa like a 189 is a migration visa. Unlike say a 457 which is not a migration visa.

All of the above could apply and domicile does not change either.
Migrate, acquire citizenship, buy a place, build a career. No plans to return to Ireland - but is still could be "home".

OK, I maybe exaggerate, but only slightly. The point is that domicile is "sticky"; it's not easy to lose your domicile of origin and acquire a domicile of choice. It certainly requires more than a stated intention to remain permanently in the country you have moved to.

I fully get that it's sticky. And I'm not saying that everyone who migrates instantly loses it. I'm saying you can.

ie
Not every one who "migrates" is leaving permanently but if you leave permanently you lose domicile at that point.

Among the things that you will likely do to change your domicile is disposing of property and assets in the country you have left. And that, of course, may realise the very capital gains that you don't want to realise until after the Revenue have accepted that you have changed your domicile.

This one I disagree with. As a non-domiciled person can have assets anywhere in the world.
But I do understand it's situational.

Peregrinus

The instances I gave are just examples of the kind of thing that you need. What you want is a constellation of facts that points to a commitment to settling permanently in the country you have moved to. A stated intention to remain there, on its own, counts for nothing; they are looking for deeds, actions, facts. Having secured permanent resident status or even naturalisation is a good start but, on it's own, won't do it. Some facts are very helpful - e.g. if you have married someone from the country you have moved to; if you have family there.

As for retaining investment property in Ireland, it's relevant what that property is. If it's the property that used to be your home, and that is now let as a furnished dwelling on an renewable lease, and that could easily become your home again, that casts more of a shadow than if it is, say, commercial property, or a passive share in a business.

It's an overall assessment that has to take account of all the facts (including, yes, some which are quite subjective). And I guess the main point is that, in the nature of things, it takes some time for all the relevant and possibly helpful facts to emerge and be established. The longer you have already been in you new country, the more likely it is that you can point to a constellation of facts supportive of your claim to have settled there permanently. Which is why going down the domicile route isn't necessarily quicker than simply waiting for your period of ordinary residence to expire. At any rate, it is unlikely to be significantly shorter. If you're not comfortable waiting for your ordinary residence to expire before realising your gain, there's a sporting chance that you're also not going to be comfortable waiting to establish your new domicile before realising your gains. Relevantly to this thread, if your gains are in crypto, I don't think waiting for either of these things is going to look like a hugely attractive strategy.

A thing that I don't know; how do you establish whether the Revenue will accept your non-domiciled status. Do you write to them and ask them to confir that they regard you as non-domiciled? Or will they just answer that they won't take a view on that until it becomes necessary in order to assess your liability to tax — i.e. after you've realised your gain and assessed yourself on the basis that you're not domiciled, then they'll look at the facts and decide if that is correct or not? If it's the latter, that's a problem, obviously.

Mellor

Peregrinus wrote: »

The instances I gave are just examples of the kind of thing that you need. What you want is a constellation of facts that points to a commitment to settling permanently in the country you have moved to. A stated intention to remain there, on its own, counts for nothing; they are looking for deeds, actions, facts. Having secured permanent resident status or even naturalisation is a good start but, on it's own, won't do it. Some facts are very helpful - e.g. if you have married someone from the country you have moved to; if you have family there.

All of those things help prove your case of course. But to say you need them is wrong imo. None of them are requirements afaik.
There's no legal requirement to buy a dwelling anywhere at any time. Revenue cannot insist on it. If there is a law that states otherwise, I'll happily concede that one.

If somebody assesses that they are not domiciled. But revenue disagree, they are entitled to claim otherwise I guess. But is the onus on Revenue or the person to prove it.

As for retaining investment property in Ireland, it's relevant what that property is. If it's the property that used to be your home, and that is now let as a furnished dwelling on an renewable lease, and that could easily become your home again, that casts more of a shadow than if it is, say, commercial property, or a passive share in a business.

True. As I said, it's highly situational.

A partial share in a family home with siblings. Implies nothing imo.
Buying out all of those siblings in the family home. Now that raises a question?
A investment property in your home town bought after you emigrated. again a question would be asked of that.
An investment property that you bought prior to emigrating that is cash flow positive. No obligation to sell imo.

If you're not comfortable waiting for your ordinary residence to expire before realising your gain, there's a sporting chance that you're also not going to be comfortable waiting to establish your new domicile before realising your gains.

That's fair enough. And as I said, its up to the individual assessing themselves.
If they are not comfortable, then its likely that they know they are still actually domiciled.

A thing that I don't know; how do you establish whether the Revenue will accept your non-domiciled status. Do you write to them and ask them to confir that they regard you as non-domiciled? Or will they just answer that they won't take a view on that until it becomes necessary in order to assess your liability to tax — i.e. after you've realised your gain and assessed yourself on the basis that you're not domiciled, then they'll look at the facts and decide if that is correct or not? If it's the latter, that's a problem, obviously.

Yes. I does open a number of lines of questioning.
For a start. How do revenue know if potential non domicilie person as realized a gain on the other side of the world. Is the onus on them or then individual.

The levy is a little straight forward and has a paper trail that confirms it applies. Although I'd be interested to know if any other the people who've paid that levy in the last decade (not many people) were non-residents in the state.

Peregrinus

There are figures available for the number of people who are resident in Ireland, but not domiciled here. There were about 7,000 of them in 2019. But what we're interested in is the people who (a) are not resident in Ireland; (b) are ordinarily resident here; and (c) are not domiciled here. My expectation is that that's a fairly small group.

And most members of that group wold be non-Irish; that is, they came here as expats, were resident here for a number of years but did not acquire domicile, have left within the past three years and so are not longer resident, but are still (for the time being) ordinarily resident.

And we're not interested in them either; we're interest in Irish people who had a domicile of origin here, who were resident here for many years but left within the past three years and so are still ordinarily resident, and who have (or say they have) abandoned their domicile of origin and now have a domicile of choice in the country they now reside in. Oh, and they are resident in, and claiming to be domiciled in, a country with which Ireland has no tax treaty, or has a tax treaty that doesn't cover CGT.

I'm going to go out on a limb and say that that's going to be a very, very small group indeed. It may in fact contain no members. And, even if that's not the case, it probably contains so few members that there isn't much lived experience which would tell us how ready the revenue is, or is not, to accept a claim to have abandoned Irish domicile in these circumstances. Most of the people who get non-domicile treatment in Ireland never had Irish domicile in the first place, so the question of what you have to do to satisfy the Revenue that you have abandoned your domicile doesn't come up very much.

Which means that, in a discussion like this, we can only answer the question from first principles. And, to anyone faced with a real-life situation where this matters, any strategy that relies on a successful claim to have abandoned Irish domicile is going to be a very uncertain one, since we really don't know what attitude the Revenue will take to that claim, and what kind of supportive evidence they will consider sufficient.

You make a good point about the domicile levy. You ask if many non-residents have paid it. Since even non-residents are only within the charge to the levy if they have €5m of assets in the state, it should be enforceable against them, so they can't simply ignore it. I don't know whether any of them seek to avoid it by arguing that they are no longer domiciled in Ireland; I do note that the section of the Tax and Duty Manual dealing with the domicile levy includes no discussion at all of the evaluation of claims to be not domiciled, or no longer domiciled, in Ireland. (Nor is there any discussion of this in the section of the manual dealing with the remittance basis of assessment, beyond saying that "there has to be clear evidence that the individual has demonstrated a positive intention of permanent residence in the new country and has abandoned the idea of ever returning to live in the "domicile of origin" country.) So there isn't much there to fill our knowledge gap as to exactly what that "clear evidence" needs to be.

Mellor

Peregrinus wrote: »

But what we're interested in is the people who (a) are not[/i] resident in Ireland; (b) are ordinarily resident here; and (c) are not domiciled here. My expectation is that that's a fairly small group.

I would suggest it's a unknown group size. As the vast majoriy people whose domicile changes, have no need to ever record their status with revenue. By virtue of ceasing being ordinarily resident, and/or not qualifying for the levy by the time it changes.

However the question still remains of when the change happens.

If some body left Ireland in 2010, with the intention to leave permanently.
In 2013 they bought a house, in 2014 they obtained new citizenship, 2015 they got married to a local, in 2016 they had kids, 2018 they set up their own business, in 2020 the kids started school locally, etc. I think we can agree that they are no longer domiciled in Ireland, and could easily provide enough proof in 2020.

Based on your domicile changing if you "move to a different country with the intention of living there permanently", I think that it's clear that occurred in 2010.
When they can prove it, would be to me, a different matter entirely.

And we're not interested in them either; we're interest in Irish people who had a domicile of origin here, who were resident here for many years but left within the past three years and so are still ordinarily resident, and who have (or say they have) abandoned their domicile of origin and now have a domicile of choice in the country they now reside in. Oh, and they are resident in, and claiming to be domiciled in, a country with which Ireland has no tax treaty, or has a tax treaty that doesn't cover CGT.

TBH, I had just gone down the rabbit hole on domicile and how it may pertain to me.
I agree that the application on the above is limited. There are much better ways to avoid double taxing.

You make a good point about the domicile levy. You ask if many non-residents have paid it. Since even non-residents are only within the charge to the levy if they have €5m of assets in the state, it should be enforceable against them, so they can't simply ignore it. I don't know whether any of them seek to avoid it by arguing that they are no longer domiciled in Ireland;

I was just aware they very few people pay the levy. Maybe 30 per year. Which amounts to very few over the last ten years. Just curious whether anyone who paid it, was a overseas resident, but domiciled in Ireland. Thinking celebrities or the like.

Peregrinus

Mellor wrote: »

If some body left Ireland in 2010, with the intention to leave permanently.
In 2013 they bought a house, in 2014 they obtained new citizenship, 2015 they got married to a local, in 2016 they had kids, 2018 they set up their own business, in 2020 the kids started school locally, etc. I think we can agree that they are no longer domiciled in Ireland, and could easily provide enough proof in 2020.

Based on your domicile changing if you "move to a different country with the intention of living there permanently", I think that it's clear that occurred in 2010.
When they can prove it, would be to me, a different matter entirely.

Couple of thoughts, in no particular order.

In your hypothetical, it's clear that the move to a different country, with the intention of living there permanently, occurred in 2010. But it's only clear because you stipulate exactly this in the first line of your hypothetical. Real life doesn't come with stipulations of fact like this.

Secondly, the test for changing your domicile isn't that you should ""move to a different country with the intention of living there permanently"; it's that there should be clear evidence that (a) you have demonstrated an intention to reside permanently in the new country and (b) you have "abandoned the idea of ever returning to live" in your country of origin.

So the question is not so much what your intention is, but what intention you have demonstrated by your acts, deeds, choices and so on. And it's a two-fold test; you need to point to facts demonstrating a positive intention of settlement in the new country, and to facts demonstrating abandonment of any idea of returning to live in Ireland. (Which is why, e.g, retaining ownership of the home you left in Ireland, which could easily become your home again, while not an absolute bar, is unhelpful; it's very much the opposite of a fact that demonstrates abandonment of any thought of living in Ireland again.)

I agree that the list of facts that you give in your hypothetical do point very strongly to the conclusion that, certainly by 2020, you could make a good case for having acquired a domicile of choice in your new country. But of course it's a hypothetical, tailored to produce this outcome; in a real-world situation the matter will involve a holistic judgment that takes account of all the relevant facts, which could include some that lean in the other direction (e.g. various links to home that have been retained, about which the hypothetical is silent). The Revenue won't make up their minds about this by having regard only to the facts that point to the conclusion that you hope they will arrive at.

As we have agreed, the discussion is probably academic, since in real life the number of people whose significant tax liability in Ireland depends on whether they have successful abandoned an Irish domicile of choice is probably vanishingly small.

There may be more such people in the UK, simply because it's a larger jurisdiction, and they also apply the remittance basis of taxation to non-domiciled residents, so domicile does have signficance for tax purposes. A quick look at the UK Inland Revenue site confirms that their manuals have a bit more detail on discussion of domicile and how it is established/investigated and, given that the concept of domicile is common to both jurisdictions, I suppose that if the issue of domicile did become live in Ireland you could look at the UK manuals as at least a straw in the wind to suggest how the Irish Revenue might approach the matter. They suggest:

- The onus is on the taxpayer to demonstrate a change of domicile.

- "A change of domicile is never to be lightly inferred, particularly a change from a domicile of origin to a domicile of choice, which is regarded by the courts as a serious step requiring clear and unequivocal evidence." This is because of "the adhesive quality of the domicile of origin".

- There has to be evidence showing that domicile of origin has been "placed into abeyance" if you are to make a case that you have acquired a domicile of choice - i.e. as in Ireland it's not enough to point to the links you have established with your new country; you have to start by pointing to the links you have severed with the old.

- Residence in a country is not decisive, but "in the absence of indications to the contrary residence creates a presumption of domicile, the strength of which grows with the length of residence."

- But it does probably have to be quite long. The UK's statutory "deemed domicile" provision stipulates residence of 15 years as giving rise to deemed domicile. Obviously at common law there's no fixed period like that, but the statutory provision I think gives a flavour of what you might need if you were relying primarily on residence in a country to demonstrate your domicile there.

Dave3030

Question-when Tesla recently said they would accept payment in Bitcoin (since suspended), was this a wink/nod that this would be a way of potentially dodging CGT?

I.e. you transfer from an exchange direct to Tesla and they send you a nice shiny car-while no money goes through your bank acc

Mellor

Thanks for that. Well explained.
I'm not entirely sure where my domicile is by that assessment. Thankfully I don't need to worry about it as long as I keep the assets below 5 million


A final thought.
In the hypothetical, we agreed that this person could prove in 2020, that they left Ireland permanently in 2010.
In 2014 they may not have been able to prove it if audited by revenue.

But I wonder, if they managed to defer proceedings for non-payment of domicile levy in 2014 until 2018 or 2020. They could likely provide evidence that they were not domicile in Ireland in 2014 and avoid the levy.

Peregrinus

Dave3030 wrote: »

Question-when Tesla recently said they would accept payment in Bitcoin (since suspended), was this a wink/nod that this would be a way of potentially dodging CGT?

I.e. you transfer from an exchange direct to Tesla and they send you a nice shiny car-while no money goes through your bank acc

No. Why would Tesla want to brand themselves as a company that aims to facilitate tax evasion? Their produce is sold into a highly-regulated market; the last thing they want to do is to have regulators regard them as some sort of pirate.

Plus, if you are trying to conceal your holding and disposing of a valuable asset from the Revenue, a car is pretty much the last thing you want to spend your crypto on. Cars, and changes in the ownership of cars, are registered and in many countries attract special taxes, so if you buy a €60,000 euro car the Revenue will know all about it without having to look at your bank account.

Mellor

Dave3030 wrote: »

Question-when Tesla recently said they would accept payment in Bitcoin (since suspended), was this a wink/nod that this would be a way of potentially dodging CGT?

I.e. you transfer from an exchange direct to Tesla and they send you a nice shiny car-while no money goes through your bank acc

No. CGT is nothing to do with money going through you bank account.
If you buy BTC. It appreciates. And you trade the BTC for a Tesla. You have made a gain.

Instead of trading for a Tesla, you keep it on the exchange and trade it for ETH. You have also realised a gain and owe CGT.

You cash it out to the bank. CGT is owed.

In each instance, the same amount if CGT is the same. (is there a delivery dee for the Tesla? Might be an expense).

Peregrinus

Mellor wrote: »

. . . A final thought.
In the hypothetical, we agreed that this person could prove in 2020, that they left Ireland permanently in 2010.
In 2014 they may not have been able to prove it if audited by revenue.

But I wonder, if they managed to defer proceedings for non-payment of domicile levy in 2014 until 2018 or 2020. They could likely provide evidence that they were not domicile in Ireland in 2014 and avoid the levy.

Well, not necessarily. You haven't changed your domicile until you have demonstrated your intention to abandon your Irish domicile. So if, in 2018, you are pointing to facts from 2015 or 2016 as demonstrating your intention, that wouldn't support a claim that you had ceased to be Irish-domiciled in 2014.

Mellor

Peregrinus wrote: »

Well, not necessarily. You haven't changed your domicile until you have demonstrated your intention to abandon your Irish domicile. So if, in 2018, you are pointing to facts from 2015 or 2016 as demonstrating your intention, that wouldn't support a claim that you had ceased to be Irish-domiciled in 2014.

Yes you have to demonstrate it , buy you don't necessarily have to demonstrate it to revenue. At some point the above events demonstrated that intention in themselves.

So if, in 2018, you are pointing to facts from 2015 or 2016 as demonstrating your intention, that wouldn't support a claim that you had ceased to be Irish-domiciled in 2014.

I imagine the first evidence he points out would be apply for and receiving permeant residency in another country , packing up and leaving in 2010.

That act is the demonstration of intent. Buying a house and obtained new citizenship further establishes it in 2014. All the other actions support that was the intent.

THe point being in 2014, if asked he may not have been able to prove it. In 2020, he could prove his intent in 2014. Just a thought about defering a self assessment.
But as you said, largely academic.

Peregrinus

Mellor wrote: »

Yes you have to demonstrate it , buy you don't necessarily have to demonstrate it to revenue. At some point the above events demonstrated that intention in themselves.

Yeah. But obviously not before they had actually occurred.

Mellor wrote: »

I imagine the first evidence he points out would be apply for and receiving permeant residency in another country , packing up and leaving in 2010.

That act is the demonstration of intent. Buying a house and obtained new citizenship further establishes it in 2014. All the other actions support that was the intent.

THe point being in 2014, if asked he may not have been able to prove it. In 2020, he could prove his intent in 2014. Just a thought about defering a self assessment.
But as you said, largely academic.

Your hypothetical doesn't stipulate that the taxpayer applied for permanent residency at any point before being naturalised in 2014. And being naturalised is hardly conclusive; it makes him a dual citizen, which means there are at least two countries in which he could choose to spend the rest of his life, in one of which he has a domicile of origin. That doesn't in itself establish his abandonment of his domicile of origin.

I guess my overall point is that if, in 2014, there are facts he can point to that successfully demonstrate his abandonment of his domicile of origin and his commitment to permanence in his new country, then the Revenue should accept in 2014 that he has changed his domicile. If in fact there is no decision on this until 2020, and that decision takes account of fact occurring in 2015, 2016, etc, then how can we say that he had demonstrated what he needed to demonstrate by 2014?

I think the position really is this; suppose it's his 2104 assessment which is in question. It may take until 2020 for a dispute about that to be resolved, but at all times the question in dispute is "was he domiciled in Ireland or in (say) France in 2014, the year of assessment?". That question can only be answered by reference to what had been demonstrated by 2014, so arguing for a change of domicile the taxpayer can only point to events that had occurred by 2014 and, if he mentions later events, the Revenue will disregard them. Thus stringing out the assessment until 2020 shouldn't help; it doesn't allow him to introduce evidence of facts occurring after 2014.

You could easily see a situation in which assessments for several years have been challenged, and the outcome might well be that the taxpayer is determined to have been domiciled in Ireland for the earlier years, and in France for the later years.

Mellor

Peregrinus wrote: »

Your hypothetical doesn't stipulate that the taxpayer applied for permanent residency at any point before being naturalised in 2014. And being naturalised is hardly conclusive; it makes him a dual citizen,

As we were talking about migration. I was intended to imply some sort of permanent residency. That probably wasn't clear, within the EU for example, it wouldn't be required. I was thinkin in non-EU terms.

As in Applies or PR in 2010 or earlier. Leaves. Naturalizes in 2014.

I think the position really is this; suppose it's his 2104 assessment which is in question. It may take until 2020 for a dispute about that to be resolved, but at all times the question in dispute is "was he domiciled in Ireland or in (say) France in 2014, the year of assessment?". That question can only be answered by reference to what had been demonstrated by 2014, so arguing for a change of domicile the taxpayer can only point to events that had occurred by 2014 and, if he mentions later events, the Revenue will disregard them. Thus stringing out the assessment until 2020 shouldn't help; it doesn't allow him to introduce evidence of facts occurring after 2014.

I'm sure revenue would only want evidence up to 2014 to be submitted.
And the person would want to bolster the pre 2014 evidence with later evidence that confirms it was his intention.

One of the courts I imagine.

barneystinson

Mellor wrote: »

As we were talking about migration. I was intended to imply some sort of permanent residency. That probably wasn't clear, within the EU for example, it wouldn't be required. I was thinkin in non-EU terms.

As in Applies or PR in 2010 or earlier. Leaves. Naturalizes in 2014.



I'm sure revenue would only want evidence up to 2014 to be submitted.
And the person would want to bolster the pre 2014 evidence with later evidence that confirms it was his intention.

One of the courts I imagine.

I think you really need to read the case law on this, it's a very intricate area and the decisions are very nuanced and very much case by case.

I'm entirely open to correction on it, but I don't think I've ever seen a published case where someone was found to have gone from being a resident citizen of the country of their domicile of origin, to acquiring a domicile of choice, in the space of a few years.

Mellor

barneystinson wrote: »

I'm entirely open to correction on it, but I don't think I've ever seen a published case where someone was found to have gone from being a resident citizen of the country of their domicile of origin, to acquiring a domicile of choice, in the space of a few years.

Maybe not.
What percent of people who permanently migrate ever go through that process. Probably 1% or less.
For many it’s simply not relevant.

barneystinson

Mellor wrote: »

Maybe not.
What percent of people who permanently migrate ever go through that process. Probably 1% or less.
For many it’s simply not relevant.

I think you might be missing my point.

Domicile is a legal concept and how it is determined or applied by Revenue for their purposes is entirely derived from the relevant case law.

If there's no case law indicating that a person can shed their domicile of origin within a few years and / or at a relatively early stage of their life, then you're going to find Revenue (and most likely the Courts) resistant to setting a precedent.

The relatively recent Henderson case in the UK might be a good one to read, in relation to how long it might take to be accepted as having demonstrated the necessary intention.

HGVRHKYY

barneystinson wrote: »

I think you might be missing my point.

Domicile is a legal concept and how it is determined or applied by Revenue for their purposes is entirely derived from the relevant case law.

If there's no case law indicating that a person can shed their domicile of origin within a few years and / or at a relatively early stage of their life, then you're going to find Revenue (and most likely the Courts) resistant to setting a precedent.

The relatively recent Henderson case in the UK might be a good one to read, in relation to how long it might take to be accepted as having demonstrated the necessary intention.

Do you work in this area or something?

Who would someone need to talk to about all of this anyway?

It's interesting to read about all this and have the likes of JP McManus in mind, who relocated to Switzerland years ago

cryptcrapto

I need to make some CGT payments this year. However I have never made any CGT payments before (I am a PAYE worker). I've had cryptos for a few years but haven't really sold any apart from during the last bull run in 2017. Through sheer ignorance I didn't pay any CGT that year on those sales. It's only when I started getting back into it this year that I realised my mistake. I understand that I will have to pay interest and penalties on that sum. My question is - what exactly do I need to do?

I have read the taxation threads on here and I can't figure out if I'm meant to declare as a sole trader or not? Given that I need to submit multiple years should that sway the decision that I need to make in this regard?

As for submissions - are people creating csv files with all of their transactions and submitting those to Revenue - or is it screenshots or what? I presume you need to calculate the tax owed yourself? Is there any software that perhaps can do this as frankly I don't even know if I could calculate it given all of the various comings and goings?

Mellor

barneystinson wrote: »

I think you might be missing my point.

Domicile is a legal concept and how it is determined or applied by Revenue for their purposes is entirely derived from the relevant case law.

If there's no case law indicating that a person can shed their domicile of origin within a few years and / or at a relatively early stage of their life, then you're going to find Revenue (and most likely the Courts) resistant to setting a precedent.

The relatively recent Henderson case in the UK might be a good one to read, in relation to how long it might take to be accepted as having demonstrated the necessary intention.

No, I understood exactly what you were saying.

I’m just pointing that the vast majority of people who permanently migrate do not test this. It may have never been tested. Therefore no cases to refer to is hardly surprising.


It’s also far more likely that people would just not declare the gains than content revenue and attract attention.

Mellor

HGVRHKYY wrote: »

It's interesting to read about all this and have the likes of JP McManus in mind, who relocated to Switzerland years ago

Funnily enough I was reading about McManus earlier. He was one of the few who’ve paid the domicile levy due to high global earnings, relatively low tax paid in Ireland. And over 5m in Irish property.

HGVRHKYY

Mellor wrote: »

Funnily enough I was reading about McManus earlier. He was one of the few who’ve paid the domicile levy due to high global earnings, relatively low tax paid in Ireland. And over 5m in Irish property.

Got a link to what you were reading? Would be interested in reading that too

It's understandable if someone has property and is earning income here that they'd still be liable for taxes here, but it's baffling to me to think that it may not be enough for someone to just reside in another country for 3+ years and be free of any worries about the Irish tax system, feels like North Korea **** to be honest

tax_tutor1

barneystinson wrote: »

I think you really need to read the case law on this, it's a very intricate area and the decisions are very nuanced and very much case by case.

I'm entirely open to correction on it, but I don't think I've ever seen a published case where someone was found to have gone from being a resident citizen of the country of their domicile of origin, to acquiring a domicile of choice, in the space of a few years.

Very interesting discussion guys.
Just to add to our discussion, have knowledge of one irish resident Irish domiciled individual who changed domicile to Portugal for 4 years, realised his Irish capital gains and then returned to his Irish home and family, recommending his business here in Ireland in year 5. Big 4 accountancy firm involved in the tax planning with fees north of €300k. Gains involved were substantial.

AtticusFinch86

tax_tutor1 wrote: »

Very interesting discussion guys.
Just to add to our discussion, have knowledge of one irish resident Irish domiciled individual who changed domicile to Portugal for 4 years, realised his Irish capital gains and then returned to his Irish home and family, recommending his business here in Ireland in year 5. Big 4 accountancy firm involved in the tax planning with fees north of €300k. Gains involved were substantial.

That's absolutely ****ing disgusting and makes a mockery of average Joe's that are struggling to get by but still have to cough up for their full tax liabilities. If I knew someone like that on my street I'd be reporting him straight to revenue.

tax_tutor1

AtticusFinch86 wrote: »

That's absolutely ****ing disgusting and makes a mockery of average Joe's that are struggling to get by but still have to cough up for their full tax liabilities. If I knew someone like that on my street I'd be reporting him straight to revenue.

The big guys can afford the best tax advice and end up the lowest % tax liabilities. The ordinary joe always get screwed.
Just to rub it in the guy had leased a private jet with own pilots to fly him over and back during his 4 year 'absence'.

HGVRHKYY

AtticusFinch86 wrote: »

That's absolutely ****ing disgusting and makes a mockery of average Joe's that are struggling to get by but still have to cough up for their full tax liabilities. If I knew someone like that on my street I'd be reporting him straight to revenue.

I think the opposite, I'd high five him. Our ridiculous, harsh capital gains rate and threshold are the issue here, congratulations to anyone who manages to achieve that if they were people who invested money they'd earned and saved. CGT only accounts for less than 2% of the annual tax take here even though the setup is abysmal and really unfair on everyone, irrespective of background and earnings

If they actually had a competitive rate and threshold and made the taxes simplified for things like ETFs/index funds, maybe less people would be concerned about something like this and we'd have more individuals growing their wealth to be self reliant and in better positions to reinvest their wealth in starting businesses themselves. You get nothing for contributing as someone in the upper tax bracket in this country, only gouged and bled dry in order to fund everyone else. Don't even get proper universal healthcare. Amateur country with a peasant mentality

HGVRHKYY

tax_tutor1 wrote: »

The big guys can afford the best tax advice and end up the lowest % tax liabilities. The ordinary joe always get screwed.
Just to rub it in the guy had leased a private jet with own pilots to fly him over and back during his 4 year 'absence'.

Was it crypto he'd made these gains with? And was the private jet specifically something used to help with it or he just splashed out for the sake of it?

I don't feel like you're rubbing anything in either, no begrudgery from me on this whatsoever, fair play to the lad

AtticusFinch86

HGVRHKYY wrote: »

I think the opposite, I'd high five him. Our ridiculous, harsh capital gains rate and threshold are the issue here, congratulations to anyone who manages to achieve that if they were people who invested money they'd earned and saved. CGT only accounts for less than 2% of the annual tax take here even though the setup is abysmal and really unfair on everyone, irrespective of background and earnings

If they actually had a competitive rate and threshold and made the taxes simplified for things like ETFs/index funds, maybe less people would be concerned about something like this and we'd have more individuals growing their wealth to be self reliant and in better positions to reinvest their wealth in starting businesses themselves. You get nothing for contributing as someone in the upper tax bracket in this country, only gouged and bled dry in order to fund everyone else. Don't even get proper universal healthcare. Amateur country with a peasant mentality

20-30% is pretty much the standard capital tax rate globally. Granted we are on the high side but you're incredibly naive if you think that same person wouldn't be tax shopping even if the Irish rate was competitive at 20-25%. I certainly wouldn't be congratulating someone that has the means to pay but refuses out of pure contrived greed, ultimately leaving the hole to be filled by those that have less means to pay. He is everything that is wrong with the wealthy classes. Happy to exploit policies, labour, education systems, property markets (or whatever else) of the country to generate his millions and happy to piss all over the same systems when it comes to paying into the same system that afforded him the platform the make his money.

relax carry on

cryptcrapto wrote: »

I need to make some CGT payments this year. However I have never made any CGT payments before (I am a PAYE worker). I've had cryptos for a few years but haven't really sold any apart from during the last bull run in 2017. Through sheer ignorance I didn't pay any CGT that year on those sales. It's only when I started getting back into it this year that I realised my mistake. I understand that I will have to pay interest and penalties on that sum. My question is - what exactly do I need to do?

I have read the taxation threads on here and I can't figure out if I'm meant to declare as a sole trader or not? Given that I need to submit multiple years should that sway the decision that I need to make in this regard?

As for submissions - are people creating csv files with all of their transactions and submitting those to Revenue - or is it screenshots or what? I presume you need to calculate the tax owed yourself? Is there any software that perhaps can do this as frankly I don't even know if I could calculate it given all of the various comings and goings?

It's a form CG1 you need to complete as PAYE individual. You'll need to be registered for CGT to pay it. You can register through your Revenue MyAccount. If you can't get it to work, send a MyEnquiries via your Revenue MyAccount asking to be registered for CGT from 2017. You can submit a completed pdf version of the CG1 via MyEnquiries.
It's a self assessed tax. You don't need to provide backup to your calculations per your CG1 unless asked. You must retain your records for 6 years. You should be charged a 10% late filing surcharge and you may be charged interest.

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/when-and-how-do-you-pay-and-file-cgt.aspx

barneystinson

tax_tutor1 wrote: »

Very interesting discussion guys.
Just to add to our discussion, have knowledge of one irish resident Irish domiciled individual who changed domicile to Portugal for 4 years, realised his Irish capital gains and then returned to his Irish home and family, recommending his business here in Ireland in year 5. Big 4 accountancy firm involved in the tax planning with fees north of €300k. Gains involved were substantial.

Are you saying that Revenue actually looked at the case, and accepted the change in domicile? Or that he's paid a Big 4 firm 300k for the tax planning, which may or may not work?

A move for 4 years would suggest he lost his ordinary residence, and therefore wouldn't be within the charge to Irish CGT on most disposals.

What do you mean by "realised his Irish capital gains"?

tax_tutor1

barneystinson wrote: »

Are you saying that Revenue actually looked at the case, and accepted the change in domicile? Or that he's paid a Big 4 firm 300k for the tax planning, which may or may not work?

A move for 4 years would suggest he lost his ordinary residence, and therefore wouldn't be within the charge to Irish CGT on most disposals.

What do you mean by "realised his Irish capital gains"?

Revenue would have been advised of his change of domicile. Revenue would have reviewed the position but he had I's dotted and t's crossed. He will be on their radar for rest of his life. Where Revenue believe a loophole is being exploited and there is a number of different cases they will have the legislation amended.
These were Irish assets that were disposed of while he was NR NOR and non domiciled.
Personally don't believe it is worth it- say €100m chargeable gain with 25% CGT rate =€75m free and clear vs €100m less say €8m costs =€92m
Costs relate to house purchase, travel, prof fees, foreign tax etc.
Tax payer, his family would struggle to notice to notice between the two net positions! Hence why I would suggest it is not worth it.

Peregrinus

tax_tutor1 wrote: »

Revenue would have been advised of his change of domicile. Revenue would have reviewed the position but he had I's dotted and t's crossed. He will be on their radar for rest of his life. Where Revenue believe a loophole is being exploited and there is a number of different cases they will have the legislation amended.
These were Irish assets that were disposed of while he was NR NOR and non domiciled.
Personally don't believe it is worth it- say €100m chargeable gain with 25% CGT rate =€75m free and clear vs €100m less say €8m costs =€92m
Costs relate to house purchase, travel, prof fees, foreign tax etc.
Tax payer, his family would struggle to notice to notice between the two net positions! Hence why I would suggest it is not worth it.

I'm not seeing the relevance of domicile here. If he was NR and NOR when he realised his gains, they they are not chargeable regardless of where he was domiciled (unless they were gains on the disposal of Irish assets in which case they are chargeable, regardless of where he was domiciled).

Either way, it seems to me, his domicile is irrelevant, so I don't see why he would be making submissions to the Revenue about it and, if he did, I don't see why the Revenue would express an opinion about it.

Plus, it's hard to change your domicile with just a four-year absence, and even harder if, by the time the issue is litigated, you have returned to your domicile of origin.

So, I may be missing something, but it seems to me that while there may have been some loose talk about this arrangement being a change of domicile, it's possible that strictly speaking it wasn't, and didn't need to be to be effective.

tax_tutor1

Peregrinus wrote: »

I'm not seeing the relevance of domicile here. If he was NR and NOR when he realised his gains, they they are not chargeable regardless of where he was domiciled (unless they were gains on the disposal of Irish assets in which case they are chargeable, regardless of where he was domiciled).

Either way, it seems to me, his domicile is irrelevant, so I don't see why he would be making submissions to the Revenue about it and, if he did, I don't see why the Revenue would express an opinion about it.

Plus, it's hard to change your domicile with just a four-year absence, and even harder if, by the time the issue is litigated, you have returned to your domicile of origin.

So, I may be missing something, but it seems to me that while there may have been some loose talk about this arrangement being a change of domicile, it's possible that strictly speaking it wasn't, and didn't need to be to be effective.

Agree re above and NR NOR position.

He did purchase foreign property as his new home while away and the domicile issue may have been just cover for how he exploited a loophole.

Peregrinus

tax_tutor1 wrote: »

Agree re above and NR NOR position.

He did purchase foreign property as his new home while away and the domicile issue may have been just cover for how he exploited a loophole.

Buying a foreign property doesn't change your domicile. Possibly he bought it because he needed somewhere to live, and he would rather buy than rent?

barneystinson

tax_tutor1 wrote: »

Revenue would have been advised of his change of domicile. Revenue would have reviewed the position but he had I's dotted and t's crossed. He will be on their radar for rest of his life. Where Revenue believe a loophole is being exploited and there is a number of different cases they will have the legislation amended.
These were Irish assets that were disposed of while he was NR NOR and non domiciled.
Personally don't believe it is worth it- say €100m chargeable gain with 25% CGT rate =€75m free and clear vs €100m less say €8m costs =€92m
Costs relate to house purchase, travel, prof fees, foreign tax etc.
Tax payer, his family would struggle to notice to notice between the two net positions! Hence why I would suggest it is not worth it.

I'm not suggesting you're lying, but I find that very difficult to believe.

Primarily because a person who still holds the majority of their wealth / asset base in Ireland, will not be able to demonstrate the necessary intent to break domicile, until after they've severed their economic ties with Ireland.

Maybe there's more to it than as you have set out but based on what you have set out I find it hard to believe that Revenue wouldn't have stood and argued the point. Particularly if the person came back onshore and recommenced business as usual in Ireland shortly afterwards, bearing in mind the legislation allows Revenue 4+ years to revisit the matter.

barneystinson

Peregrinus wrote: »

I'm not seeing the relevance of domicile here. If he was NR and NOR when he realised his gains, they they are not chargeable regardless of where he was domiciled (unless they were gains on the disposal of Irish assets in which case they are chargeable, regardless of where he was domiciled).

Either way, it seems to me, his domicile is irrelevant, so I don't see why he would be making submissions to the Revenue about it and, if he did, I don't see why the Revenue would express an opinion about it.

Plus, it's hard to change your domicile with just a four-year absence, and even harder if, by the time the issue is litigated, you have returned to your domicile of origin.

So, I may be missing something, but it seems to me that while there may have been some loose talk about this arrangement being a change of domicile, it's possible that strictly speaking it wasn't, and didn't need to be to be effective.

If he was only temporarily non resident then, unless he stayed fully outside the charge to Irish CGT for over 5 years, he'd be caught by Section 29A upon his return.

That AA provision only applies to Irish domiciled individuals, so I can see how a change of domicile could potentially bring someone outside the scope of the provision. But as I said previously, from anything I've ever seen and read I'd have thought it'd be impossible to change domicile without first having changed your centre of economic interests.

Mellor

tax_tutor1 wrote: »

Revenue would have been advised of his change of domicile. Revenue would have reviewed the position but he had I's dotted and t's crossed. He will be on their radar for rest of his life. Where Revenue believe a loophole is being exploited and there is a number of different cases they will have the legislation amended.
These were Irish assets that were disposed of while he was NR NOR and non domiciled.
Personally don't believe it is worth it- say €100m chargeable gain with 25% CGT rate =€75m free and clear vs €100m less say €8m costs =€92m
Costs relate to house purchase, travel, prof fees, foreign tax etc.
Tax payer, his family would struggle to notice to notice between the two net positions! Hence why I would suggest it is not worth it.

As with the above the 4 years part makes me think it was a NOR issue.