Tax treatment of ETFs for Irish abroad

[settlement]

Hi all,

I have only recently read the horrifying tax treatment of UCITS ETFs subject to 41% CGT and also 8 years taxation even when not sold.

I am not currently resident in Ireland but do hold UCITS ETF.

If I am to return to Ireland at what stage will these taxation rules apply? Should I sell before becoming tax resident in Ireland? Is it possible to return to Ireland and leave again before the 8 years are up in order to avoid dividend taxation?

 

[settlement]

Bump

 

[Boyd]

Seems not many people are knowledgeable on this..........have you considering emailing revenue to find out, rather than waiting for a month for a reply?

 

[Gordon Gekko]

If I am to return to Ireland at what stage will these taxation rules apply? Should I sell before becoming tax resident in Ireland? Is it possible to return to Ireland and leave again before the 8 years are up in order to avoid dividend taxation?

1) The year for which you become tax resident under the 183 or 280 day tests.

2) Possibly, depending on the income/gain position and the tax implications where you currently reside.

3) It is possible, but you must also be mindful of "ordinary residence"; once you're been resident for three years, you need three years of non-residence to lose ordinary residence.

If you are currently residing in a favourable jurisdiction (e.g. Dubai), it might be worth rebalancing your portfolio in favour of US ETFs and UK investment trusts which do not attract 41% tax.

 

[Steven Barrett]

If you sell out, you have to pay tax where you are resident at the time, so it could be beneficial to cash out before you become Irish resident again and reinvest when you return.


Steven
www.bluewaterfp.ie

 

[settlement]

Thanks for responses. This ordinary residence business is a bit strange. Do other countries impose that? It seems stringent