Private Client 2019

Author:Mr John Gill and Lydia McCormack
Profession:Matheson
 
FREE EXCERPT
  1. CONNECTION FACTORS

    1.1 To what extent is domicile or habitual residence relevant in determining liability to taxation in your jurisdiction?

    Domicile is a very significant connecting factor. Where an individual is tax resident in Ireland (the "State"), the addition of domicile as a connecting factor will mean that all of the individual's worldwide income and gains are subject to Irish tax, subject to any reliefs under existing double tax treaties.

    The concept of habitual residence does not exist in Ireland and is not defined under Irish law.

    1.2 If domicile or habitual residence is relevant, how is it defined for taxation purposes?

    There is no statutory definition of domicile under Irish law, it is a legal concept. Every individual is born with a domicile of origin. It is possible for a person to lose their domicile of origin and acquire a domicile of choice or to lose their domicile of choice and revive their domicile of origin.

    1.3 To what extent is residence relevant in determining liability to taxation in your jurisdiction?

    In Ireland, a person's tax liability is determined by the concept of residence. A resident individual's worldwide income and gains are subject to income tax and Capital Gains Tax ("CGT") (save if they are non-Irish-domiciled and being taxed on the remittance basis of taxation as outlined at question 3.2 below). Since 1 December 1999, Capital Acquisitions Tax ("CAT") is charged if either the beneficiary or the disponer is Irish resident or ordinarily resident on the date of the gift or inheritance.

    1.4 If residence is relevant, how is it defined for taxation purposes?

    Under Irish legislation, a person will be regarded as Irish tax resident if they are:

    present in the State for a period of 183 days or more in the tax year (which is a calendar year); or present in the State for a period of 280 days or more in the current and previous tax year, subject to the provision that where a person is present here for 30 days or less, they will not be regarded as resident in that tax year. The other important issue is that of ordinary residence. Under Irish legislation, an individual becomes ordinarily resident in Ireland for a tax year after he has been resident in the State for three consecutive tax years. An individual who has become so ordinarily resident in Ireland for a tax year shall not cease to be ordinarily resident until a year in which he has not been resident in the State for the previous three consecutive years.

    1.5 To what extent is nationality relevant in determining liability to taxation in your jurisdiction?

    Irish nationality does not trigger any tax liability in Ireland.

    1.6 If nationality is relevant, how is it defined for taxation purposes?

    See question 1.5.

    1.7 What other connecting factors (if any) are relevant in determining a person's liability to tax in your jurisdiction?

    If assets are regarded as Irish situate under Irish tax legislation (for example, Irish real property), the relevant Irish tax liability will apply.

  2. GENERAL TAXATION REGIME

    2.1 What gift or estate taxes apply that are relevant to persons becoming established in your jurisdiction?

    CAT is a tax imposed on gifts and inheritances ("Benefits"), payable by the beneficiary. The current rate of CAT is 33%, subject to tax-free thresholds which provide monetary value lifetime...

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