Unless they were seconded to work abroad as opposed to simply choosing to go then they are liable for a clawback of SD as soon as they rent the property out if this happens within the first five years of ownership. They also no longer qualify for owner occupier mortgage interest tax relief at source although they can offset 100% of mortgage interest and other allowable expenses against rental income. Oh - and obviously they are assessable for income tax on the rental income.I know a lot of people in my profession who bought new houses recently, and qualified for stamp duty relief ( and when possible, got the first time buyers grant). Many have moved abroad to continue training for a few years and are renting their homes out.
If they are not paying the SD clawback (if applicable), are not declaring rental income and are still claiming owner occupier mortgage interest tax relief then they are engaging in fraud and tax evasion.When they return, and go to sell their houses, surely revenue will know that they were non residents for a while as they would not have completed tax returns.
See above.Since they were not living in their houses for all the time, will they have to backpay the stampduty?
Only the first 12 months after vacating one's PPR is exempt from CGT when renting it out. Otherwise some portion of any eventual capital gain will be assessable for CGT based on how long the property was a rental property versus an owner occupied property. For example if the property was owned for 7 years, lived in for 2 and rented for 5 then (5-1)/7 = c. 57% of any eventual resale gain would be assessable for CGT. This is apart from the SD clawback etc.How long must you be living back in your primary residence for, after renting it out, so that it no longer is liable to capital gains when you sell it?
If that's what it takes for some people to meet their tax liabilities like the rest of us then bring it on.I can see a lot of people getting caught out this way
Unless they were seconded to work abroad as opposed to simply choosing to go then they are liable for a clawback of SD
Anything's possible - just look at the various investigations from bogus non resident accounts to tax evading life assurance policy holders over the years. Revenue are also rolling out a new profiling system to help them identify taxpayers who might be worth auditing.Clubman, how do you think they will get caught out?
Will their solicitor blow the whistle? I doubt it. If a solicitor mentions stamp duty during the sale process can't the client just say they were living in it? If the solicitor pushes the issue can't the client can just go to a more compliant solicitor?
Do you think Revenue will eventually decide to investigate every sale over the last 5-10 years?
Anything's possible - just look at the various investigations from bogus non resident accounts to tax evading life assurance policy holders over the years. Revenue are also rolling out a new profiling system to help them identify taxpayers who might be worth auditing.
On the secondment issue, it was raised here before.
Revenue Customer Service said:It also states that any period of absence not exceeding 4 years where as a condition of your employment you are obliged to work abroad .A period of absence will only be ignored under the above rules if both before and after the total period of absence the house was occupied by the individual as
his/her principal private residence and throughout which he/she had no
residence or main residence eligible for relief.
The most obvious way they will be "caught out" is if the tenant submits a rent relief form (note that if the landlord comes to an "agreement" it just means they'll lose out twice if the tenant applies anyway). Revenue will quite happily accept a rent form without the landlords PPS number.
Slightly off topic but why do some people assume that foreign nationals are necessarily less likely to suss out the tax system in the host country and figure out what they are entitled to? It's not rocket science and the information is readily available (and in many different languages from the likes of OASIS and Revenue for example).(by possibly only renting to foreign nationals who aren't aware of the tax system).
On what basis? I'd be more inclined to assume that Revenue are less likely these days to operate amnesties and more likely to simply purse aggressively tax evaders and defaulters.I believe there will be property related amnesty/round up in the next couple of years.
Slightly off topic but why do some people assume that foreign nationals are necessarily less likely to suss out the tax system in the host country and figure out what they are entitled to? It's not rocket science and the information is readily available (and in many different languages from the likes of OASIS and Revenue for example).
On what basis? I'd be more inclined to assume that Revenue are less likely these days to operate amnesties and more likely to simply purse aggressively tax evaders and defaulters.
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