Once you move to Ireland and spend sufficient days here to become Irish tax resident, you will be deemed Irish tax resident from 1 January of the relevant tax year and the tax planning window is closed.

Planning on moving to Ireland?

Ireland is becoming a very attractive destination to relocate to be it for work, lifestyle or retirement as it offers strong job opportunities especially in technology, finance, and pharmaceuticals, with many multinational companies based here. Ireland’s high quality of life,, shared language, strong education systems, and family or ancestral ties provide additional reasons to settle and build a life in Ireland.

Albeit there may be many positive reasons for choosing Ireland, it is extremely important that the tax implications are considered to ensure the positives do not result in negative tax consequences for you.  

You may have built up your personal wealth and investment portfolios and your tax situation can be complicated by moving to Ireland. Therefore pre arrival tax planning is vital before you make the move to avoid any pitfalls on arrival.

Seeking specialist Irish tax advice before becoming Irish tax resident can provide significant opportunities to safeguard and optimise personal wealth — particularly if you intend to rely on the remittance basis of taxation.

Pre-Arrival Tax Planning to be considered

The following are the key tax matters that need to be considered:

• Residence & Domicile – Understanding the tax residency rules and the impact of domicile status on your exposure to worldwide taxation.
• Tax Planning - Remittance Basis – If you are non-Irish domiciled, Ireland offers the remittance basis — a major planning opportunity.
• Reviewing Investment Portfolios, bank accounts etc. – This is extremely important to ensure they are efficiently structured before becoming Irish resident as not all foreign Investments qualify for the remittance basis.
• Employment income and bonuses –You may be able to avail of split year relief. The impact on your foreign employment income and bonuses on becoming Irish tax residency should be considered.
• Taxation of employment Share Schemes – reviewing your equity plans for the Irish tax treatment on becoming Irish tax resident.
• Trusts, companies & Investment structures – Ireland has complex rules for foreign trusts, foreign companies etc. which includes anti-avoidance rules. Therefore review of overseas structures needs to be considered.
• Pension & retirement planning – reviewing overseas pensions and potential pension lump-sum withdrawals is required before becoming tax resident in Ireland.
• Inheritance and gift tax exposure – Ireland charges Capital Acquisitions Tax at 33% based on the residency position of the donor or beneficiary and location of the assets.
• Avoiding double taxation - Without proper planning, you might end up paying tax on the same income in two countries.

Remittances Basis of Taxation in Ireland

In Ireland, the remittance basis of taxation applies mainly to individuals who are resident but not domiciled in Ireland.

Under the remittance basis, foreign income and foreign capital gains are only taxed in Ireland if (and when) they are brought into Ireland (“remitted”). This is different from the normal worldwide basis, where all income and gains are taxed regardless of where they arise.

You are generally taxed on the remittance basis if you are resident in Ireland and not domiciled in Ireland. Domicile is about your permanent home or long-term intention, not just where you live right now.

A remittance would include a transfer of money to an Irish bank account, using foreign funds to pay Irish expenses or ringing cash into Ireland.

If your planning on relocating to Ireland and you are not Irish domiciled, you should qualify for the remittance basis of tax. Therefore, there may be tax planning opportunities as a non-Irish domiciled individual taking up residency in Ireland.

The rules on remittances are complex and there are also certain anti avoidance rules which apply to the remittance basis.

Importance of Tax Advice Before the Move

Moving to Ireland can be exciting, but tax issues can quickly become complicated if you don’t plan ahead. Getting professional tax advice before the move helps you avoid unexpected costs, penalties, and missed opportunities.

Once you move to Ireland and spend sufficient days here to become Irish tax resident, you will be deemed Irish tax resident from 1 January of the relevant tax year and the tax planning window is closed.

The benefits of pre-planning planning include:

• Structuring foreign income/gains to ensure no Irish tax exposure.
• Ensuring investments and bank accounts are appropriately segregated.
• Avoiding deemed remittances into Ireland.
• Determine the quantum of remittances of income into Ireland to utilise the lower income tax bands and tax credits effectively.
• Plan the sale of foreign assets for capital gains tax efficiently.
• Planning the gifting of foreign assets for Capital Acquisition Tax efficiently.

If you would like to discuss further planning please contact our team who have considerable expertise in this area.