Resident in Ireland, non-Irish citizen: domicile?

[torblednam]

Well just for the sake of completeness here's what the form says, to assist with answering the question:

(Domicile is not defined in tax legislation but is a concept of general law. It may broadly be defined as meaning residence in a particular country with the intention of residing permanently in that country. Every individual acquires a ’domicile of origin’ at birth, usually the domicile of the father. A person’s domicile of origin will remain with him/her until such time as a new ’domicile of choice’ is acquired)

We will have to agree to disagree on the weight an appeal commissioner or judge will be likely to attach to an individual repeatedly stating that they are residing in Ireland with the intention of residing permanently here. I believe that it is an assertion that may be quite persuasive in establishing the intention of the person at a point (or several points) in time, unless there's clear, contemporaneous, factual evidence pointing to a contrary intention.

 

[Gordon Gekko]

A change that was only introduced in 2018!

And it’s still too vague for a layperson to understand.

I stand by my view that an Appeal Commissioner (e.g. Lorna) would not attach too much weight to what’s reflected in the return. We’re generally talking about “foreign” people here. You may not be aware of this, but in a lot of other jurisdictions, domicile and tax residence are interchangeable terms.

What’s looked at in a contentious case are the principles which have been established in cases like Claire Proes vs The Revenue Commissioners. I’m sorry, but a lot of the problem with Revenue is that they look at themes like domicile through too narrow a lens. The advisor looks at the position broadly whereas the Revenue official rants and raves about the Form 11 like it’s some form of smoking gun when it’s not. Paper (online or real) does not refuse ink. What it says on a Form 11 cannot change the facts.

You seem to be honing in on a fictional scenario where someone knowingly claims Irish domicile for years and then makes a dramatic volte face; with respect, that’s classic Revenue ‘Reds under the Bed’ paranoia. I doubt that’s ever happened. What does happen all the time is people who have come to Ireland haven’t a notion about the concept of domicile versus residence and its implications until it’s pointed out to them. Previous ticking or non-ticking of a box on the Form 11 is not a barrier to being a non-dom; one either is or isn’t.

 

[torblednam]

We're dancing on the head of a pin a bit now, but just to be clear that I understand you, if you ask someone if they are residing in a country, with the intention of residing there permanently, and they say "Yes, I am residing here with the intention of residing here permanently", that declaration carries little or no weight, in your view?

Italy applies the same criteria for determining domicile as Ireland AFAIK, open to correction though? However, domicile is one of the tests for tax residence in Italy. So, in order to argue to Irish Revenue that he hasn't changed from his domicile of origin in Italy, the OP would be asserting that (by application of the same domicile rules for Italian purposes as apply here) he has been tax resident in Italy (as well as Ireland) throughout the last 15 years. The potential downside consequences of that will need to be thought through as well.

At risk of drawing more fire from you Gordon, I believe it really doesn't really help the OP if they're trying to convince an appeal commissioner or judge, that they filed God knows how many Irish tax returns and incorrectly paid tax here as a domiciled individual, whilst simultaneously (but on an entirely consistent basis) failing to comply with the obligations they would have in Italy as a person purporting to have retained their domicile there, such as, for example, wealth tax. Looks messy.

 

[Gordon Gekko]

Yes torblednam, that’s exactly what I am saying.

I am saying that if you ask 100 ‘foreign’ people whether they reside in Ireland permanently, the vast majority will answer “yes” because they will conflate that with “living here the whole time”.

But then when you dig into it, it will turn out that lots of them do not intend to stay here forever. For example, they intend to retire to a third country or to return to their home country.

 

[cuy]

What does happen all the time is people who have come to Ireland haven’t a notion about the concept of domicile versus residence and its implications until it’s pointed out to them.

The above very accurately describes the situation I found myself in, before I asked my original question in this thread and started reading up on what this remittance basis of taxation was.

The Form 11 also contains an explanation of what domicile means, at the relevant panel - one box or the other has to be ticked, and there's a 3-line explanation - so tax professional or otherwise, I don't believe it's as straightforward as just playing dumb to have that declaration discounted.

In all honesty, if I had known about the implications of domicile (i.e. the advantages of the remittance basis of taxation with regards to CGT), I would have paid closer attention when ticking that checkbox.

Is it possible to amend previous Form 11 returns to correct the erroneous domicile declaration?
If so, what would be the best approach to engage with Revenue to correct / resubmit past Form 11 returns?

Is it advisable to engage with Revenue to amend past returns?
Or should I instead just suck it up, accept that I overpaid/prepaid my capital gains tax liabilities for previous years, and from now on tick the non-domicile option on the form 11 returns and pay my CGT liabilities according to the remittance basis of taxation where it applies?

 

[Gordon Gekko]

No, if there are meaningful refunds to be had, you should look to amend your returns and claim those refunds, subject to the ‘four year rule’ in Section 865. Revenue will run the rule right over this so you should probably get professional advice.

 

[cuy]

Italy applies the same criteria for determining domicile as Ireland AFAIK, open to correction though? However, domicile is one of the tests for tax residence in Italy.

I found a "Fiscal guide for residents abroad" published by the Italian Revenue Agency in 2015: Guida fiscale per i residenti all'estero
This might be useful to other Italian citizens in similar circumstances as me.
The above link points to a PDF document hosted on the webiste of the Italian Consulate in Sydney.

I haven't fully digested the whole document, but right at the start it states that a person is deemed to be non-resident in Italy for tax purposes if they meet the following conditions:

1. they are not registered with the A.P.R. ‘Anagrafe della Popolazione Residente (Resident Population Registry) of the Municipality they lived in when resident in Italy. Registering with the ‘Anagrafe degli Italiani Residenti all’Estero’ A.I.R.E. (Registry of Italian nationals living abroad) effectively removes a person from the A.P.R.
2. they do not have their domicile (domicilio) in Italy, where domicile is defined as the "main location of someone's business and interests". The "interests" component is interpreted as personal and family relationships, and takes precedence over the "business" component (i.e. if someone's business/employment is located in country A, but your family/spouse/children are located in country B, that person's domicile is in country B).
3. they do not have their habitual residence (dimora abituale) in Italy. Habitual residence is defined as the location where the person usually resides / lives.

I believe I meet the three conditions above.

So, in order to argue to Irish Revenue that he hasn't changed from his domicile of origin in Italy, the OP would be asserting that (by application of the same domicile rules for Italian purposes as apply here) he has been tax resident in Italy (as well as Ireland) throughout the last 15 years. The potential downside consequences of that will need to be thought through as well.

It seems that the concept of domicile as defined in point 2. above (domicilio) is different from the concept of domicile as defined in Irish general law (broadly defined as meaning residence in a particular country with the intention of residing permanently in that country ).

Claiming to Irish Revenue that I retain my Italian domicile of origin does not imply claiming to Italian Revenue that I have a domicilio (as in point 2.) in Italy. It does not imply being tax resident in Italy (as well as Ireland).

 

[MisterMu]

Claiming to Irish Revenue that I retain my Italian domicile of origin does not imply claiming to Italian Revenue that I have a domicilio (as in point 2.) in Italy. It does not imply being tax resident in Italy (as well as Ireland).

Hi cuy - I was just wondering if you managed to claim the non-domiciled status, as I am in a similar situation...

 

[cuy]

Hi cuy - I was just wondering if you managed to claim the non-domiciled status, as I am in a similar situation...

I ticked the correct "Not domiciled in Ireland" option in my Form 11 return for 2020. I didn't bother amending my previously submitted Form 11 returns.