Non domiciled and CGT? Tax return necessary?

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xxxSedgexxx

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Hello,

I am new to this forum and would greatly appreciate your feedback.

I'm French and have lived in Ireland for 10 years. I live and work in Dublin (PAYE) so I'm tax resident in Ireland. I opened an online trading account in the US in 2008 which I use to buy and sell shares at times. I'm non-domiciled in Ireland (I am married to a French wife here with 2 children and we all intend to return to France in a few years) so I never paid CGT on my U.S. trading profits in Ireland (to date about $30K).

A question that has only come to my mind recently:
- If I am not liable for tax in Ireland, does this necessarily mean I am liable for tax in France?

Could it be possible that I am not liable for tax on the profits, whether in France or in Ireland? I am very confused and don't know who to address these questions to.

Thanks,
Sedge
 
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Can't post a link but go to revenue.ie and the CGT FAQ.

Going by your description you are:
"If you are resident or ordinarily resident in the State but not domiciled you are liable on gains from the disposal of Irish situated assets in full and on gains from the disposal of foreign assets to the extent that the gains are remitted into the State."

Not sure how French CGT works, would imagine there is some reciprocal agreement to tax French domiciled nationals abroad..
 
Any tax gurus out there know the answer to the OP's question? If not, how would one go about finding out?
 
From my CAP II Tax book the explanation provided by KlausFlouride is correct for Non-Dom. I would imagine the gains would be subject to French CGT with a credit for CGT paid if the funds are remitted into Ireland. Question is are the funds in a French bank account or sitting in the US online account. If in a French account then pay the French CGT without delay.
 
Irish CGT only arises on a gain if the disposal proceeds are remitted (i.e. brought) into Ireland. There shouldn't be any French CGT.
 
Gordon Gekko said:
Irish CGT only arises on a gain if the disposal proceeds are remitted (i.e. brought) into Ireland. There shouldn't be any French CGT.
Click to expand...

Merci beaucoup for your reply Gordon. Much appreciated. For clarity, I'm only enquiring for a friend and want to be sure to be sure that I am not leading her astray. So, if she transfers the proceeds from her US share account to her French bank account, are you saying that she is not liable to French CGT? [Is there any source that you can refer me to so that I definitively put her mind to rest on this one?]

Thanks again
 
I can't see how someone who's not French resident could be on the hook for French CGT purely because of transferring those gains into a French bank account.

A US account does potentially create US estate tax issues.
 
Gordon Gekko said:
I can't see how someone who's not French resident could be on the hook for French CGT purely because of transferring those gains into a French bank account.
Click to expand...

Thanks Gordon......you're not on the clock, right?:)

Can't see it myself either but two other posters above were of a different view - hence my search for "comfort".

As a matter of interest, do the concepts of residence, ordinary residence and domicile that we have in Ireland exist in the French taxation system also?

Gordon Gekko said:
A US account does potentially create US estate tax issues.
Click to expand...

For avoidance of doubt, is this referring to taxes payable on one's estate upon death?
 
I'm not a French tax expert, but they certainly have the concept of residence and domicile. Ordinary residence, I don't believe so.

Yes, US taxes on death.
 
French CGT for non-residents in the EEA is 19%, 33% if elsewhere. Social charges of 15.5% are payable on top of that. However for shareholdings, length of ownership means that after 8 years the CGT element falls away.

You are tax resident in France if at least 1 of the following 4 criteria is fulfilled

1. France is your main residence

2. You reside in France more than 183 days per calendar year.

3. Your occupation is in France

4. France is the country where you have most of your substantial assets (centre of your economic interest)
 
On French situs assets presumably?

So if I sell some Berkshire Hathaway through my US brokerage account and then transfer the sales proceeds to my account with BNP, I'm not on the hook for French CGT?

These are rhetorical questions BTW.
 
Thanks Gordon and Nordkapp for your replies.

Nordkapp - Just to be clear, if my friend is not a French Resident, are you saying that she is liable to French CGT? Is the reason for this because she transferred the sale proceeds of her U.S. shares into her French bank account?
 
This is just my opinion but if they are not resident in France (do not meet any of the 4 criteria) but reside here, then I cannot see CGT being payable in France unless the funds are remitted here. Your friend does need to consider that if the funds are sizeable that the French Bank may report the lodgement to the French Revenue as a matter of course. It would be best to seek a more local opinion in France from someone more familar with the workings of their tax system. I gather they do not miss much!
I got a Belvin Franks legal book on the tax implications of moving to France as they are legal experts in the matter, lets say it did enlighten me!
 
Thanks Nordkapp

Is this the book called "Living in France"?
 
Dan Murray said:
. For clarity, I'm only enquiring for a friend and want to be sure to be sure that I am not leading her astray.
Click to expand...

Well this is a sure fire way to ruin a beautiful friendship by relying on the web for something as important as a definitive answer where you need an expert on not only the laws of America, Ireland and France but the laws on domicile as it pertains to a particular tax, CGT but might just as well be income tax in one of those countries and goodness knows what else. Like a change in the law in any of those countries at a particular time, or a remitance based tax.
 
My dear Bronte,

I think you have a point but are being a tad harsh! Here's my perspective:

1. I asked did any tax gurus know the answer to the question - knowing that it was a toughee.
2. Gordon Gekko who, in my experience, is a capable tax practitioner gave his answer.
3. I told Gordon that what he said is in line with my own views but could he substantiate his view so that I could provide definitive advice to my friend.
4. Gordon was unable to do so.
5. So I am left with my question unanswered.
6. It follows that I have no web talk to rely on :(
7. And would that that was not the case :):eek:

Sin é....
 
When it comes to foreign tax issues, it is very difficult for an Irish adviser to be definitive. All I can do is reflect my own personal experiences with French tax and legal advisers in respect of Irish clients and my own understanding of how tax treaties work generally.

The scenario seems to be as follows (with company names etc added to make it more "real life"):

- Sedge is tax resident in Ireland and has been for many years.
- Sedge is French domiciled.
- Sedge owns some Coca-Cola shares via a brokerage account with Goldman Sachs in New York.
- Sedge disposes of the Coke shares and makes a gain.
- Sedge will not bring the sales proceeds back into Ireland.
- Sedge may transfer the sales proceeds to an account with BNP in Paris either immediately, or down the line, at which point Sedge may or may not have returned to France.

My analysis is that no Irish CGT arises and that, based on my experience, I cannot envisage any French CGT arising because Coke is not French situs and Sedge is not tax resident in France. The caveat is that I'm not a French tax expert and that I would always advise a client to seek French tax advice. Or perhaps, if I suspect the query is mundane, I'd pick up the phone and bounce it off a French tax adviser to ascertain the need for formal advice.
 
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