Declaring tax from abroad

[settlement]

Hi all,

I have realised a small gain. I am not resident in Ireland for tax purposes but still remain 'Ordinarily Resident'. This gain was realised on cryptocurrency and fortunately (or unfortunately) will not be liable to capital gains tax as it falls within the limits of the €1270 capital gains exemption. I will deal with the attendant tax in my current resident country.

My question relates to informing Revenue. I understand no taxation will arise but I feel obliged to inform them (in case any confusion should arise later). Is there a certain way of doing this? Or should I just leave it.

 

[Palerider]

But if you have no liability you have nothing to report ?

 

[dub_nerd]

Keep a record of your foreign tax return for future reference. No need to inform Revenue and would only confuse things.

 

[torblednam]

But if you have no liability you have nothing to report ?

That's not correct, they have a gain that is less than their annual allowance, and they want to have it on the record.

E.g. Bought €1m of crypto and sold same for €1,001,000. The receipt of €1,001,000 might be queried at a later date, but if the transaction (and the tax outcome) is already returned it's much less likely to be.

OP, you can file a manual CG1 form if you aren't otherwise filing an income tax return here.
https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/formcg1.pdf The 2018 form won't be available until early next year.

 

[dub_nerd]

That's not correct, they have a gain that is less than their annual allowance, and they want to have it on the record.

They don't need any annual allowance because they have no liability. The only record that's required is that you paid tax in another jurisdiction.

E.g. Bought €1m of crypto and sold same for €1,001,000. The receipt of €1,001,000 might be queried at a later date, but if the transaction (and the tax outcome) is already returned it's much less likely to be.

What? Showing that you don't owe any tax on the 1,000 doesn't explain where the €1m came from. All it does is imply that you were liable for tax in Ireland when, in fact, you weren't. It's a recipe for total confusion.

 

[torblednam]

They don't need any annual allowance because they have no liability. The only record that's required is that you paid tax in another jurisdiction.

Per the OP he has no liability because the chargeable gain falls within his annual allowance of €1,270 (hence me using a figure of €1k). If he didn't have his annual allowance he would have a (small) liability.

 

[dub_nerd]

Per the OP he has no liability because the chargeable gain falls within his annual allowance of €1,270 (hence me using a figure of €1k). If he didn't have his annual allowance he would have a (small) liability.

The OP says two different things, without indicating which one actually applies. They say they "will not be liable to capital gains tax as it falls within the limits of the €1270 capital gains exemption", but also that they "will deal with the attendant tax in my current resident country". I am taking at face value their statement that they are tax resident in another country while being ordinarily resident in Ireland (which can happen if they've lived here in the last three years). Revenue's general information is vague on exactly how this affects CGT. You might have to look very closely at the actual legislation or pay someone to do it for you. But in general, if you are tax resident in another country you pay your taxes there and have no liability in Ireland nor any obligation to report your foreign taxes in Ireland.

 

[torblednam]

I think, with respect, that you are passing comment on a subject you know very little about. The OP himself knows more than you, and you've tried to correct me without having a breeze what you're talking about.

As an ordinary resident of Ireland the OP remains within the charge to Irish CGT (hence him referencing this fact), and he may also be subject to CGT wherever he is currently resident. That is why we have Double Taxation Agreements, to cater for people with liabilities in more than one jurisdiction. The two things that you assume must be mutually exclusive are not so.

 

[Ciru75]

they are tax resident in another country while being ordinarily resident in Ireland (which can happen if they've lived here in the last three years). Revenue's general information is vague on exactly how this affects CGT.

"Section 29(2) provides, in general, that a person, who is resident or ordinarily resident and domiciled in the State for a year of assessment, is chargeable to Capital Gains Tax (CGT) on disposals of assets wherever the assets are situated." From: https://www.revenue.ie/en/tax-profe...ains-tax-corporation-tax/part-02/02-03-01.pdf

Seems clear to me.

 

[dub_nerd]

I think, with respect, that you are passing comment on a subject you know very little about. The OP himself knows more than you, and you've tried to correct me without having a breeze what you're talking about.

As an ordinary resident of Ireland the OP remains within the charge to Irish CGT (hence him referencing this fact), and he may also be subject to CGT wherever he is currently resident. That is why we have Double Taxation Agreements, to cater for people with liabilities in more than one jurisdiction. The two things that you assume must be mutually exclusive are not so.

In fairness, I acknowledged the limits of my understanding in my reply. Revenue says this:

"Depending on your residence and domicile status you may also have to pay Irish CGT.

You may be able to deduct some or all of the foreign CGT you have paid when calculating how much Irish CGT you owe. The amount you can reduce your Irish tax by depends on whether Ireland has a Double Taxation Agreement (DTA) with the country that your property is located in. See Tax Treaties for more information on double taxation.

If you pay more foreign CGT than Irish CGT you can only claim a credit up to the amount of Irish CGT that you owe. You can deduct a single annual exemption of €1,270 when calculating the amount of Irish CGT that you owe."​

I did say I've no idea how the first (bolded) sentence applies (so, ok, probably should've kept my gob shut ). But depending on the answer, there's one of two possibilities: 1) you're not liable for CGT in Ireland in which case there's no need to make a return, or 2) you're liable for CGT in Ireland which can be offset against the annual exemption limit and any CGT you pay in the other country if there is a double taxation treaty. In the case of 2) you should make a return even if the amount of CGT is zero.