Do Non Irish residents pay USC

nbc

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Hi

I'm based in London for the past 8 years- so Irish non resident.
I pay tax on rental income in Ireland at 20%.
Am I supposed to pay USC?
Am I allowed to pay PRSI in order to receive pension benefits?

Many thanks

nbc
 
Both interesting questions - I think USC is due. If you put your details in an Offline ROS F11 (income tax return) and click the non-resident box the computation will give you the answer. As a non-resident you are exempt from PRSI, and there is a box on the F11 to tick to achieve the exemption. In relation to your benefits you may be able to elect to a PRSI voluntary contributor. Check out the Department of Social Protection website under "voluntary contributor" and give the information line phone number a call.
 
I'm based in London for the past 8 years- so Irish non resident.
I pay tax on rental income in Ireland at 20%.
Am I supposed to pay USC?
Am I allowed to pay PRSI in order to receive pension benefits?

I'm non resident:

2017
USC threshold is €13,000 each.

USC on rental income is computed BEFORE Capital Allowances unlike trading income where it is after Capital Allowances.

If USC threshold is passed, then income from €0 to €12,012 is liable at 0.5% , the next €6,760 at 2.5% then above that 5.5%


PRSI

No clue about this but I don't think you can pay this to get pension benefits on rental income. But you should contact the Irish pension office to find out if you can contribute to increase your rights.
 
Thanks Bronte
I had no idea USC was due on rental income as a non resident. So if my taxable income is E40,000 I pay USC on 28000 as the first 12000 is exempt? Do I get a credit for this in the UK?
Also is it correct that that I pay 20% income tax on everything? The online calculator is asking me to pay 40% on the portion above E33000.
Regards
nbc
 
Yes, you should get a credit for USC in the UK against your income tax. The Revenue have stated that they have written to their treaty partners to say that USC is an income tax.

You may be entitled to some tax credits and this can be completed on the box on the return. However if you are filing your F11 for 2017 today I'd suggest filing your return and then claiming any credits you are due afterwards. It sounds correct that you should be paying tax at 40% above €33,800. Provided you have clicked the correct buttons regarding your residency and your exemption from PRSI you can rely on the calculation. I personally haven't come across a case where it was incorrect.
 
Thanks Dublin 67
I thought that the 20% was a flat rate on all income even if you earned a million?
It makes little difference to me as I would have to pay 40% over in UK anyway
That's great about USC- I would have thought it wasn't considered income tax
Do you know if I can elect to pay PRSI?
NBC
 
Yes, you should get a credit for USC in the UK against your income tax. The Revenue have stated that they have written to their treaty partners to say that USC is an income tax.

Very interesting as I though that was like prsi, a social contribution. Any chance of a link? Also did they classify the property tax in any way?
 
I thought that the 20% was a flat rate on all income even if you earned a million?
It makes little difference to me as I would have to pay 40% over in UK anyway

You pay 20% on a certain amount and then the higher rate on anything above that. And there are certain advantages when you are older, but don't ask me the rules. That the bands are wider or something.

Due to double taxation rules my understanding is that what you pay in Ireland is used as a credit when you declare the rental income in the UK so presumably you'll have no more to pay.
 
Question for you Nbc, how is rental income treated in the UK?

Though based on the fact you didn't realise that you need to pay USC which has been around a few years now, plus you didn't realise about the other tax rate you're only probably now getting your tax affairs in order. If you are, then I highly recommend you use an accountant. I suggest you hire one from AAM as there are a few of them on here, but don't ask them until the beginning of next month as they are all exhausted.
 
Here is the link: https://www.revenue.ie/en/tax-profe...ns-tax-corporation-tax/part-18d/18D-00-01.pdf from the Tax & Duty Manual at the top of page 19.

I'm not aware there is anything similar for LPT.

I see on page 3 Revenue says USC is not income tax, yet on page 19 they say USC is substantially similar to income tax and is to be treated as such in foreign countries.

I've be very interested in Mandelbrot's view of that. Because to me one is contradicting the other.
 
No contradiction. The page 19 part is for the purposes of interpreting double taxation agreements with other countries.
 
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