Revenue "clampdown" - Are US Shares an 'offshore asset'?

Discussion in 'Investments' started by sadie, Feb 22, 2017.

  1. sunnydonkey

    sunnydonkey Frequent Poster

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    What about a non-resident who moves back to Ireland, having opened normal accounts abroad while non resident and then retained them?. As far as I can see Revenue doesnt ask about these, only accounts opened in the past year.

    It also asks about 'chargeable assets' acquired, without giving any explanation of precisely what these are.

    As somebody mentioned above it seems that Revenue are way behind the curve on how modern self investment is done, and still think of accounts abroad as a way of hiding 'black money' instead of a more efficient investment system than that offered by irish banks.
     
  2. newtothis

    newtothis Frequent Poster

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    The following has already been quoted:

    I'm tempted to ask "what part of that do you not understand?" to those who keep asking if previously opened accounts have to be declared. "you do not need to make a disclosure" sounds pretty unambiguous to me.
     
  3. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Because in theory there's a €4,000 fine if you open a foreigh bank account and don't tell Revenue about it.
     
  4. torblednam

    torblednam Frequent Poster

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    There is a €4,000 penalty for all sorts of things in the taxes acts.
     
  5. dub_nerd

    dub_nerd Frequent Poster

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    Exactly. The practitioner notes I linked earlier state under S.895:

    "In addition, Irish residents themselves are obliged to report the opening of such accounts
    on their annual returns of income. This obligation applies irrespective of whether the
    matter also falls to be reported by a financial institution or other agent"

    "As the provision is an anti-evasion one, substantial penalties are provided for non
    compliance. In the case of financial institutions and other agents, the penalty is €4,000
    for each occasion they fail to comply with the section. In the case of the taxpayer, non
    compliance attracts the surcharge for late submission of returns under section 1084. The
    surcharge will apply for the year in which the undeclared account was opened."


    This says nothing about not having to report the account if there is no tax liability, so I would not necessarily draw comfort from the other Revenue notes that might seem to suggest otherwise. I doubt Revenue would entertain complaints about their inconsistency when they were slapping penalties, late payment surcharges and interest on you. (Although I've just noticed that the €4k fine is for non-compliant banks and agents, not the taxpayer, which is some relief). Better safe than sorry, which is why I have asked Revenue to clarify.
     
  6. Fella

    Fella Frequent Poster

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    I've a Saxobank account , no letters from revenue if they mail me ask me do i have a foreign bank account ill tell them ,otherwise I wouldn't worry about it. Sure loads of people have Revolut or that other bank N26 or something are they all expected to declare them .
     
  7. joe sod

    joe sod Frequent Poster

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    "I'm tempted to ask "what part of that do you not understand?" to those who keep asking if previously opened accounts have to be declared. "you do not need to make a disclosure" sounds pretty unambiguous to me."

    Fair enough thanks for that , its just the wording that is confusing "declaring" money moved offshore leads you to believe that you have to notify revenue of money you have moved offshore whereas my understanding now is that "declaring" means that you have paid all taxes due before you move it offshore. Then when we received the letter informing us that we need to check our tax returns using "voluntary disclosure" leads you to think that everything is not in order and that you are being flagged on the revenue system because you have not "declared" an offshore account. It seems the word "declare" has many meanings
     
  8. fistophobia

    fistophobia Registered User

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    So when you transfer 100 Euro to your offshore broker account - revenue needs a disclosure? Lovely.
     
  9. T McGibney

    T McGibney Frequent Poster

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    2,670
  10. joe sod

    joe sod Frequent Poster

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    The problem is they sent a non descript email asking are you sure your tax affairs are in order?, Then they sent a link to their "voluntary disclosure" info, but the information is not absolutely clear on what accounts have to be disclosed and how to do it. Then we find out from the media that they only sent those emails to people that they now know have offshore accounts but which they never before explicitly asked for information on. If they sent an e-mail asking for information on all accounts held offshore it would be an awful lot simpler. It leads you to believe that your tax affairs are not correct but you are not sure either ways.
     
  11. newtothis

    newtothis Frequent Poster

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    Can you share the wording you are referring to? Anything quoted so far seems unambiguous to me. You're starting to worry me now: I've had an offshore account for many years (never closed it after moving back here after living abroad). I've never declared I've had it on the basis it was opened long before the requirement to declare any offshore accounts being opened and any funds transferred to/from are already taxed.

    Having to declare all movements transferred offshore seems extraordinary too: where is this stated as a requirement?
     
  12. major

    major Registered User

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    12
    Got a letter from them today about reviewing and correcting my tax returns as a self assessment taxpayer which also included qualifying disclosure information so not too sure if they have something on me or just reminding me to be very careful with my returns or else!!
     
  13. joe sod

    joe sod Frequent Poster

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    Last edited: Feb 24, 2017
    this is the wording I decided just to copy and paste it into reply

    "Reviewing and Correcting Your Tax Returns

    Dear
    Thank you for filing your 2015 Income Tax return.
    The tax returns filed by the vast majority of taxpayers are correct and complete. If your returns for all taxes are correct and complete, Revenue would like to thank you for that.
    Revenue is writing to self-assessed taxpayers to make sure they are aware of how to correct any errors that have been made in, or any omissions from, any tax return they have filed.
    You will be aware that Revenue carries out a range of checks to ensure that returns are filed and are correct. If you are concerned that you may need to correct a tax return, it is important for you to know that there are significant advantages available, if you make any necessary corrections before Revenue contacts you. By doing this, you can avail of reduced penalties, avoid having your name published in the List of Tax Defaulters and avoid possible prosecution.

    Details of how to correct any returns and the benefits of making a ‘qualifying disclosure’ are set out in Revenue’s Code of Practice for Revenue Audit and other Compliance Interventions (the ‘Code’), which has recently been updated. I am enclosing a summary sheet on the Code which I hope you will find useful. More details, including the full Code and Frequently Asked Questions (FAQs), are available on our website at www.revenue.ie/en/business/disclosure.html.

    From 1 May 2017, significant changes are being made where any corrections to tax returns relate to a person’s offshore matters or matters outside the Republic of Ireland. These changes restrict a person’s opportunity to make a ‘qualifying disclosure’. If this affects you, there are full details on our website explaining the changes, and you should come forward and correct your tax returns by making a ‘qualifying disclosure’ before 1 May 2017. You may wish to consider getting independent advice if you have such an issue.
    If your returns are correct, again thank you and you do not need to take any action. If you need to correct a tax return, or there is something you wish to disclose, you will find further details on our website.
    Yours etc."
     
    Last edited: Feb 24, 2017
  14. fistophobia

    fistophobia Registered User

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    25
    What I read into this.. rule by fear.
    Gestapo tactics.
     
  15. dub_nerd

    dub_nerd Frequent Poster

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    I don't think anyone's said that every transfer has to be declared. Revenue want you to disclose the existence of offshore bank accounts once. You're expected to declare any foreign gains or earning for tax each year. There's no suggestion that you have to declared each transaction.
     
  16. lukas888

    lukas888 Registered User

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    Revenue are sending out 500,000 Reviewing and Correcting return letters over the next few weeks.
    Have no fear you are not singled out.:)
     
  17. fistophobia

    fistophobia Registered User

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    It would not matter - if you were transferring amounts over a certain figure, your Irish bank is obliged to report it to Revenue.
     
  18. edmondantis12

    edmondantis12 New Member

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    4
    I posted also in the tax forum. I wonder if this is valid also for non-irish / non-domiciled in Ireland. I transferred some of my PAYE income and sold some shares (Revenue approved) then moved them to my US brokerage account over many years and reinvested them with them in the US. I had gains some years, some years losses but never reported any income or CGT to Revenue since I never remitted the profits back to Ireland. An independent tax consulting firm after analyzing my situation told me that non-doms have no tax liability on the disposal of US shares held offshore unless they are remitted to Ireland. I read the FAQ but they are not clear at all. For example there is no indication if long term residents but non-dom individuals are supposed to report foreign income, foreign brokerage accounts even if there is no tax liability. I know non-doms are probably a small percentage but still there is no clear indication on how the treatment would be. I may get a second opinion in the next few weeks. So far I have not received any letters but I'm not self assessed since my only income in Ireland is PAYE so may never receive it.

    Edmond
     
  19. dub_nerd

    dub_nerd Frequent Poster

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    Right. At least Revenue got back to me promptly. Unfortunately they provided essentially no information. Here's what I asked them:

    "Recently I received Revenue's letter "Reviewing and Correcting Your Tax Returns" via ROS, which I understand has gone to all self-assessed tax payers. Among other things it states: "From 1 May 2017, significant changes are being made where any corrections to tax returns relate to a person's offshore matters or matters outside the Republic of Ireland. These changes restrict a person's opportunity to make a 'qualifying disclosure'".

    "I understand that foreign bank accounts must be disclosed to Revenue. I have a question regarding a foreign share trading account, i.e. an account held with a share broker in another country. (To be specific my query relates to Saxobank UK Ltd.). The account itself can be used only for share trading, there is no deposit interest involved, and Saxobank do not consider it a "bank account". Dividends and gains/losses on shares are all separately accounted for on tax returns, and any money lodged to the account is all fully tax-paid in Ireland."

    "I believe this does not count as a foreign bank account, but Revenue's wording is very general in some of its communications. So for the avoidance of doubt I wish to ask if a foreign share trading account is a foreign account that must be disclosed (under S.895 on Form 11, and separately to declaration of gains thereon for CGT) and is potentially subject to the penalty of €4,000 for non-disclosure."
    _____________________________________________________________


    Here is Revenue's reply:

    "Dear Sir, Thank you for your email dated 24/02/2017 and the information supplied. Without inspecting documentation relating to the account it is not possible to determine whether it falls to be disclosed under S895. Revenue's main concert is that all income and gain arising in the account is declared for tax purposes. I would suggest that in your 2016 tax return you declare the existence of the account albeit it is not an account opened during that year. Regards Christine Hickey Offshore Assets Group "
    _____________________________________________________________


    This seems extraordinary -- Revenue can't tell you what accounts have to be declared without seeing "documentation", but you are expected to figure it out yourself without being given any criteria. I've looked at all the legislation and I still can't figure it out. I am going by the Taxes Consolidation Act 1997 Section 895 to which Form 11 refers, which says:

    “deposit” means a sum of money paid to a person on terms under which it will be repaid with or without interest and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person to whom it is made;

    “foreign account” means an account in which a deposit is held at a location outside the State;


    With such a general definition it seems quite possible that a foreign trading account is a "relevant account", so it seems there is no choice but to declare it, which is what Revenue suggested anyway. My problem now is that my 2016 tax return is long gone. Time for an amendment I guess. :rolleyes:
     
  20. joe sod

    joe sod Frequent Poster

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    @dub_nerd, thanks for that information, I am in the same position as you, thanks for sharing the reply. So my interpretation is that everything is in order so, we just have to enter details of the offshore trading accounts in the 2016 return. Once we have been declaring income and gains we are ok. Its the confusing wording that is really offputting and worrying. It looks like they are after people that have an offshore account maybe opened by their company (many US companies do this) and never declared anything to revenue. But I usually dont do my 2016 return until late in the year after may 1, I presume just enter the details under "foreign bank account" section. As you say a foreign trading account cannot be confused with a foreign bank account and that is the only specific information revenue have asked for up to this point. The thing is if they were honing in on foreign assets why did they not put a specific and clear entry into form 11 for people to enter those details. I mean why dont they ask for more information on form 11 to iron out these inconsistencies. If they explicitely asked for foreign assets held in offshore accounts it would probably bring many more people out of the woodwork or even prevented people hiding assets.

    Im glad of this site askaboutmoney where people can share stuff like this ,its a big help when revenue sends out letters like this