Non Dom - CGT on shares

M

max4ever

New Member
Messages
4
Hello,

I recieved RSUs from employer and taxed at 52% (non-domiciled) and the vested shares are on broker account in US. Let's say the value at vest is 10K, now after 2 years the value of the shares is 20K
Using the remittance basis of taxation, if I sold the share and transfer 10K to Ireland (income which I already paid tax) and left the profit 10K at broker accont I shouldnt be liable for CGT, right?

Any help/experience with this is appericated. Thanks
 
Yes I believe your theory is correct but be careful on execution - e.g. its clean when you choose to sell the lot and then transfer the value at original vest back to Ireland - in your example above you can't just sell 10k worth and remit that and leave the 10k worth there in the company shares - otherwise it will be deemed that you have moved the gain back to Ireland. Keep good records - you could get asked about it in a few years time and having a clear trail of you tax paid capital separate to your gains and income is important.
 
yeah, I got your point .. so for example of each share worth 1k and now they are worth 2k each

1- selling 5 shares only for 10K and transfer back to Ireland will basically require reporting 5K CGT (-1270 allowance).
2- selling all 10 shares for 20K and transfer back to ireland 10K shouldnt trigger CGT event, reporting will be 10K (sold value) - 10K (original amount) then CGT=0 .. then gains can remain outside in the broker account or transfer back to home country

btw, the documention on Revenue website is very confusing so wanted to confirm before selling the shares .. based on my understanind from the docs .. when transfering from account with mixed money (income / gain ..etc) .. the first amount remiited to Ireland will be the income which was already taxed before
 
Gordon Gekko said:
The €10k transferred to Ireland would be subject to 33% CGT.

It’s a mixed fund, basically.
Click to expand...

based on Revenue documentation

5.6. What is the position if a remittance is made from a ‘mixed’ fund account?

Any remittances out of an account containing capital and income are treated as first
coming out of the income part of the fund until such income is fully remitted (see
the tax case of Scottish Provident Institution v Allen – 4 TC 409).

---
The idea is that the princible amount was already taxed at 52% (income), what is the best way to get that amount without taxation (like if you sold the shares right away without gain/losses)
 
max4ever said:
based on Revenue documentation

5.6. What is the position if a remittance is made from a ‘mixed’ fund account?

Any remittances out of an account containing capital and income are treated as first
coming out of the income part of the fund until such income is fully remitted (see
the tax case of Scottish Provident Institution v Allen – 4 TC 409).

---
The idea is that the princible amount was already taxed at 52% (income), what is the best way to get that amount without taxation (like if you sold the shares right away without gain/losses)
Click to expand...

It’s not possible. Forget the fact that the principal was subject to an income tax event. That just makes it like a base cost. Say you acquire a share for €10,000, sell it for €20,000, and then transfer €10,000 to Ireland. That €10,000 is a taxable gain. You can’t say “no, it’s not that €10,000, it’s this one”.
 
I maybe wrong but I think it is partly possible if you can work with the broker to prevent it becoming a mixed income/capital fund in the first place. ie once you own the shares, the dividends from the shares are paid into an income account within the broker account. You then have a clear split of capital and income. (of the capital some is original capital and some is capital gain, but its all capital. )

When you then sell the shares you could:
  • Spend the capital abroad tax free - holidays etc
  • Remit it to Ireland for some of the reasons that are tax exempt (e.g. gifts to children, maintenance of children, the more kids you have the more use this is!!).
  • Bring the capital back to Ireland and pay the CGT owed. I think it is as @Gordon Gekko says that you don't get to pick which the 10k of gain is and which the original 10k is - if you bring 10k back its assumed that's the gain.
I know you talk in examples of 10k because you don't want to divulge the total amount, but if its significant, and you have other non-dom investments etc its definitely worth getting professional advice here as these things are always far easier if set up properly from the beginning and then the right trail kept to demonstrate why its not a mixed fund etc. I am fairly sure what you are asking isn't impossible (basically how do you avoid the full 33% CGT on the gain) but it is by no means simple either.
 
Last edited:
Farma1 said:
I maybe wrong but I think it is possible if you can work with the broker to prevent it becoming a mixed income/capital fund in the first place. ie once you own the shares, the dividends from the shares are paid into an income account within the broker account. You then have a clear split of capital and income. (of the capital some is original capital and some is capital gain, but its all capital. )

When you then sell the shares you could spend the capital gain abroad - holidays etc, or remit it for some of the reasons that are tax exempt. You can then remit your original 10k capital back tax free.

I know you talk in examples of 10k because you don't want to divulge the total amount, but if its significant, and you have other non-dom investments etc its definitely worth getting professional advice here as these things are always far easier if set up properly from the beginning and then the right trail kept to demonstrate why its not a mixed fund etc. I am fairly sure what you are asking isn't impossible (basically how do you avoid the full 33% CGT on the gain) but it is by no means simple either.
Click to expand...
Thanks, this is really helpful.
in my case, I dont have dividends. so if I sold the shares and stayed in my broker account they are all capital (+ gains) .. So not sure if it will be treated as mixed funds if it is all capital and it is very easy based on transactions document to seperate this 10K is capital and the other 10K gains but I might be wrong.

The logic for this one I think is more related to non-dom tax treatment and remittance basis not the shares I think.
Are there any recommendation for tax advisor / professional to help with this in Dublin?

Thanks.
 
max4ever said:
Thanks, this is really helpful.
in my case, I dont have dividends. so if I sold the shares and stayed in my broker account they are all capital (+ gains) .. So not sure if it will be treated as mixed funds if it is all capital and it is very easy based on transactions document to seperate this 10K is capital and the other 10K gains but I might be wrong.

The logic for this one I think is more related to non-dom tax treatment and remittance basis not the shares I think.
Are there any recommendation for tax advisor / professional to help with this in Dublin?

Thanks.
Click to expand...
Yeah its definitely not even as simple as your 1st paragraph above. I've read up a little more and edited my post accordingly. If its a sizeable amount definitely seek advice. If its smaller amount just use it for foreign holidays!!!
 
You must log in or register to reply here.
Back
Top