moved out of Ireland - sold stock options - tax liability?

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rbcrbcrbcrbc

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Hello,

I lived in Ireland for a few years until 2010, when I moved to the USA. When I moved out, I sold all my belongings, closed all bank accounts, and stopped perceiving any income there.

I have been contacted just a few days ago by the Revenue Commissioner stating that I must complete a Return for Income and Capital Gains for year 2012.

I suspect (but am not sure), this may be related to some stock options I sold in 2012, some of which I suspect I was awarded while living in Ireland.

Any advice on best way to proceed? Should I fill a RTSO1, even though I am not a resident of Ireland, and moved out 2 years ago? Anything else I should do?

Does anyone know how it works with double taxation and the USA?
 
You are taxable in Ireland on the proportion of the gain that relates to your employment in Ireland. Take for example you have a four vesting period and two years of that were spent in Ireland then 50% of the gain would be taxable in Ireland. The taxation of stock options arises when you exercise the option and not on grant (assuming that the options are capable of being exercised less than seven years after grant).

The tax is payable within 30 days of option using form RTSO 1 as you mention. You will also need to file a tax return (probably a Form 11 or Form 11E) for the year of exercise.

Regarding double taxation Ireland would have primary taxing rights for the period that you spent in Ireland. Presumably you will get a credit or exemption in the US for the Irish tax paid but I'll leave that up to a US tax specialist.

I would regard it as unlikely that you will have a CGT liability in Ireland (assuming of course that you made a capital gain on the disposal of the shares) - this is probably a US liability.
 
Thank you, very clear. A few more questions.

Given that I have not filled RTSO 1 within the 30 days, what is the best option?

Do it now, better later than never? Contact them and ask [1]? Wait until they contact me? Will there be a fine?

[1]: I have already contacted them - as I'm still not sure this is the reason they contacted me asking to file a Retrun for Income, and I am worried there might be something else lingering around in Ireland. But have not received any response, although I asked more than a week ago, at this point.
 
If you know the exact liability, then fill in a form 12 and send it in. It would be unlikely that they would penalize you.
 
You may be liable to interest on the late payment of tax. They may, or may not, charge this depending on the amount. If they are planning on charging you interest they will write to you. Work on an interest rate of 10% per year simple interest - it will be slightly different form this as they use a daily rate.

You will need to file a Form 11 E (Box 236) in relation to your share options. A Form 12 won't work as there isn't space for share options. If you are filing your tax return late (i.e. if the share options were exercised prior to 31 December 2011) you will probably get hit for a late filing surcharge. If the options were exercised in 2012 make sure you get the tax return filed by 31 October 2013 (within the next four weeks).




http://www.revenue.ie/en/tax/it/tax-return-forms.html
 
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