Hey everyone, Stephanie Wickham here with another episode of TaxBytes for Expats. In this week's replay, we're diving into the important topic of tax domicile from an Irish perspective.

Now, your tax domicile is a key factor in determining your exposure to Irish taxes, especially for those of you moving to Ireland from abroad. We'll run through the different types of domicile, how to determine yours, and what it means for your tax situation.

I know it can seem a bit complicated, but don't worry - we'll break it down in plain English so it's easy to wrap your head around. Whether you've got an Irish domicile of origin or you're looking to understand what a domicile of choice means for you, this episode will point you in the right direction.

Main Topics discussed in this episode:

1. Definition and overview of tax domicile from an Irish perspective
2. Types of domicile: domicile of origin, domicile of choice, and domicile of dependence
3. Acquiring a domicile of choice and the burden of proof on the taxpayer
4. The importance of determining domicile for Irish tax exposure, particularly for foreign income and gains
5. The remittance basis of tax for non-Irish domiciled individuals who are Irish tax residents

Disclaimer: The information provided in this podcast is for general informational purposes only and should not be construed as legal or tax advice. Always consult with a qualified tax advisor or accountant regarding your specific situation. The hosts and guests of this podcast disclaim any liability for actions taken based on the information discussed.

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Mentioned in this episode:

Check out ExpatTaxes.ie to get your Tax sorted!

Welcome to tax bytes for expats. The top tax tips

you want to know as an expat, the podcast is here to help

answer the common queries and concerns expats have when moving to

or from Ireland. Complex taxes explained

simply, we'll focus on the irish and international

tax issues to be aware of to ensure you save time,

money and stress. Hi

there, Matthew Bliss here, producer and editor for this amazing

podcast and fellow expat. While our illustrious

host Stephanie Wickham is on her working holiday, we thought we'd

revive some educational episodes in the feed. We're rapidly

approaching the tax lodgement deadline in Ireland, and if you've been putting it off like

I have, I wouldn't blame you. There's a lot more to consider as expats

in Ireland. So in this week's replay, Steph is talking about

tax domicile in Ireland. Your considerations and tips

to point you in the right direction. Stick around for the next episode two,

where Steph replays the episode about tax credits and

claiming them as an irish tax resident. Thanks for subscribing to the

show and enjoy.

Hi everyone. Welcome to today's episode of tax bites

for expats. It's just me today, and the plan

is to talk about tax domicile

from an irish perspective, of course, as always. And

this is something that comes up. Quite frequently when we speak to clients,

both those who are moving to Ireland, but also irish people returning

from overseas. Or irish people who are looking to move abroad.

So it's quite a relevant topic we find. And from an irish tax

perspective, domicile. Is quite a key concept for an individual

when they're trying to determine their. Exposure to irish taxes,

or I suppose, to determine whether or not

a basis. Of taxation that we call the remittance basis of tax applies.

I'll talk a little bit more about. That later in the episode

to kind. Of start with a brief overview of

domicile. We'll run through some of the key things that

we generally talk to clients. About when we have this discussion. I

do want to start by saying. That, you know, as we

kind of stress in every episode, this is not

advice and it shouldn't be construed as such. It's general information.

And we do always suggest if you've. Got questions about your

domicile, you do. Need to seek professional advice.

The aim today is to give an. Overview of the issues and to kind of

address some of the common queries that we get. But that doesn't mean that what

we're. Discussing is going to be sufficient for. You to act on. So please bear

that in mind. Okay, all the disclaimers out of the way,

let's talk about what domicile is. Now. What's interesting about

it is that it's. Not something defined in irish

law. So everybody has a domicile, but there's. No

definition in the tax legislation for what domicile is. And that's because it's

a common law. Legal term rather than a tax

defined phrase. And under common law,

everybody must have. A domicile, and they can only have

one domicile at a time, and they can't be without a

domicile. So there's various types, but generally what

we see is, you know, the first thing we'd focus on when having a discussion

with an individual is trying to determine what their domicile of origin

is. And this is probably best illustrated by way of

example. You know, if we're talking to an. Individual who is

living in Ireland, has lived in Ireland all her life, intends. To live here

indefinitely, was born here. To irish parents,

let's say their parents were married at the time of their birth. Their dad

was irish, generationally irish. It's

quite clear that they have what we call an irish domicile of

origin. Contrast that with somebody who is not

irish, was not born in Ireland, has not lived in

Ireland, and ask the. Question, where am I domiciled? Well,

under irish law, they're not irish domiciled. So

distinction there between an irish person. And a foreigner

and their domicile position can very easily be

very different. It's possible for a person to have. A

domicile in a country that they have never lived. This essentially is a

concept that's rooted in case law. But

interestingly, you know, what? We're focusing there on the fact that most

people will inherit their father's domicile at the time of their

birth, where. People tend to have more questions is. Around,

well, can I change my domicile? And

I think we would generally answer that with possibly,

possibly. But it is very important to understand

that it's not an easy thing to do. So I suppose,

you know, when we. Talk about residency from an irish tax. Perspective, it's broadly a

question of fact. You know, you either are a tax. Resident because you've spent a

certain number. Of days in Ireland or you're not. It's as simple as that. In

many scenarios, domicile is a slightly deeper

discussion. And the reason for that is because. You know, where

somebody has been born with a certain domicile of origin, like we just

discussed, it is possible for them to acquire a domicile of

choice. Which will operate above and

beyond the domicile of origin for that period of time, potentially

indefinitely. But a domicile of choice is essentially. Something that an

individual acquires, and determining it exists

requires somebody to understand the. Individual'S intention and

their circumstances with respect. To where they plan to make

their home permanently. And there's quite

a definite period of. Time attached to

somebody having a domicile of choice in a new country. For example,

if somebody comes to Ireland. With an intention to remain here

indefinitely until their dying day, and they can. Support

that, in other words, show that. That is their

intention. So, for example, if they can show that they have acquired a burial

plot. In Ireland, they have a will under irish law. You

know, their personal financial assets are in

Ireland. They have severed their connection with

their previous country. You know, we're

starting to be able to have a conversation about whether or not they've acquired what

we call this. Domicile of choice in Ireland. So it takes quite

strong, definite action on the part of the taxpayer

to. Acquire a domicile of choice in any given

location under irish law. So I suppose the fact that

an individual has a presence in Ireland

doesn't of itself align with the fact that they have an irish

domicile. So what this means is we have. Lots of clients who are

potentially, or are arguably very tax resident in Ireland.

In other words, they've been here for many years. They may not have acquired an

irish domicile of choice. So those two things are not.

They don't necessarily go hand in hand. It is possible to be irish resident. But

to retain that foreign domicile, there. Needs to be a

final and deliberate intention. So, you know,

generally this means that. There has to be a severing of almost all

connections with the country of. Origin, and

that those steps need to. Be taken to establish a

permanent relationship in the country of choice.

And usually this is where the difficulties.

Arise, is that it can be difficult. To give conclusive

evidence that a domicile of choice has

been acquired, but not impossible.

I think that the key point here then, as well, is the burden of proof

is always on the taxpayer to. Prove that they have acquired a new

domicile. And if that cannot be done

sufficiently, the accepted position is that their previous domicile

holds. Okay, so,

you know, what else on the domicile front, as you can tell,

it's not necessarily a straightforward area.

It can be quite complicated and very specific on an

individual's personal circumstances. And plans. There is an

abundant case law, both irish and UK, which helps us in

these scenarios. So there can be certain things that have been

decided on in the courts that can point towards an

individual having. Acquired or

not acquired domicile of choice in

a specific location. There is a

third concept of domicile that's worth mentioning,

and it's just around. Kind of a child's domicile. It's referred to as a

domicile of dependence. Broadly, a child is

incapable of having. An independent domicile

to that of their parents until they reach the age of 18.

And in most cases, a

child's domicile. Position will follow that of their fathers until

that point. And obviously, it can get a slightly more

complicated. A child's parents change their

domicile before the individual reaches the age of

18. Or if one of the parents dies, or if the parents are living

apart. That's always an area where a little bit more scrutiny is needed to kind

of get to the correct position.

Okay, so why do we care?

You know, we spend a lot of time here talking about legal concepts that most

people will have limited application in. Their day to day lives.

The reason we ask the question about. Domicile is because

it is very important. In determining an

individual's exposure to irish. Tax when they have become irish

resident. So what I mean by that is. If we're

talking to an individual who's an irish resident, the starting point is to say to

them, your worldwide income is in the irish tax net. We're talking here about, you

know, the. Generic tax residency tests that we would. Have spoken and referred to in

previous episodes. Where the domicile piece comes

in is. Mainly in relation to whether

or not. Ireland will tax foreign income

and foreign gains for an individual based on their

domicile. For an irish domicile person,

the short. Answer is that if you're irish domiciled, Ireland will

tax your worldwide income and gains irrespective of whether or

not the foreign income. So, for example, foreign

rental property, foreign capital gains are brought or

remitted to Ireland. That's a really key

point. It is really important at this point to say that

Ireland may tax an individual because

they're an irish resident and. Irish domiciled on worldwide income. But that's not to say

that a. Second location doesn't also have the right. To tax a certain

income or gain. So, for example, if you have

a. Rental property in France, it's highly likely that France will tax the

income from that rental property. Ireland, if the individual

taxpayer is an irish resident and irish domiciled Ireland will. Also

tax the french rental income. However, because we have a double tax.

Agreement with France, there'll be credit given in Ireland for the french tax.

That's broadly how it will work for an irish domiciled individual.

Where it starts to get a bit. More interesting is when we're talking about somebody

who is not irish domiciled. So if a review of their domicile position

has been carried out, a tax. Advisor or

accountant has determined that they. They do not have an irish domicile.

Of origin or an irish domicile of choice, then

they are eligible for what. We call the remittance basis of tax. And this is

very simply a basis. Of tax, which says

foreign income and. Foreign gains are not

taxed for an irish resident taxpayer unless

the income or. Gains are remitted to Ireland. And this is really

where the value of domicile is, is around. Okay, once

we've determined that you do not have an irish

domicile, we now. Look at your foreign income, your foreign. Gains,

one specifically income tax under schedule D, case

three, and foreign capital gains, that are for

anybody who wants to reference irish legislation, section 29 of the

TCA 1997. So, as you can

probably see, it's so important for a non

irish person to be clear on their domicile, because if we

contrast how an irish resident domiciled person pays

tax, in other words. The french rental income never comes to Ireland. Well,

it doesn't make a difference. Ireland will tax it regardless. But once the foreign

domiciled individual knows that the french rental income is

only taxable if the money is remitted to Ireland. Now, they're

in a position where they can take steps to ensure that they. Don'T inadvertently

remit it, or remit it. If not otherwise

required. So, look, this is just an

overview. As you can see, this is where. Some of the more

detailed advisory work is done with people who are moving. To or from

Ireland. And as always, you know, if you've. Got questions about

your circumstance, drop us a line. We'd be very happy to step you through

them. And I think the key message is, be clear on your

domicile. If you're an irish resident taxpayer,

you're. Required to tick a box on the tax return. Remember, the tax

system in Ireland is. A self assessment system. So you self assess

your domicile, but. There is obviously established case

law and. Revenue guidance that helps an individual discernment their

domicile. And if somebody's moved to Ireland from overseas and has lived here

for two or three years. There is nothing to say that they are

automatically irish domiciled simply because they've lived here for a few

years if. They weren't born with that irish domicile of origin. So

hopefully you haven't set you all. To sleep and you found this somewhat helpful

touching on some fairly complicated tax topics,

but ones that are really relevant to our clients. Thanks very

much for tuning in. And yeah, drop us a line

infoxpatttaxis. Ie or take a look at our

blog expattaxes ie. There's some articles particularly

relevant to foreign domiciled individuals and we

offer tailored consults to individuals who want to talk about

this specific topic in more detail.

Thanks for listening to tech for expats. Please do leave a

rating or review wherever you listen to your podcast. And as always,

remember to take professional tax advice specific to your

personal circumstances before acting or refraining from action

in connection with the matters dealt with in this series. The material

in this podcast is intended to give general guidance only.