Split income relief question

[eddieore]

Hi, I left Ireland in 2009 to work abroad until late 2011 and want to ask if anyone has the experience of retrospectively applying for split income tax relief. It seems the Revenue do not automatically apply that relief and they have written to me saying that my worldwide income is subject to Irish taxation for the years 2009-2011.
My days spent IN/OUT of Ireland were:
2009 (261 days IN/104 days OUT)
2010 (41 days IN/ 324 days OUT)
2011 (75 days IN/290 days OUT)

 

[Joe_90]

Revenue have written to you saying your worldwide income is subject to Irish Tax.

We're you self employed before you left? Are you a proprietary director?

Split year relief work by making the person non resident from the date of departure where they are non resident in the year following the year of departure.

Split year relief applies to PAYE income. Do you have any Irish Source income?

You only have a 4 year window to reclaim tax so 2009 will be out soon.

 

[eddieore]

Revenue have written to you saying your worldwide income is subject to Irish Tax.

We're you self employed before you left? Are you a proprietary director?

Split year relief work by making the person non resident from the date of departure where they are non resident in the year following the year of departure.

Split year relief applies to PAYE income. Do you have any Irish Source income?

You only have a 4 year window to reclaim tax so 2009 will be out soon.

Thanks for reply. To answer your questions:
I was a PAYE worker before I left.

I am not a proprietary director.

I have no Irish Source income.

I have not paid any tax on the worldwide income, rather I hope to receive tax free clearance(from date I left Ireland in 2009 until return in late 2011) on the basis of the 'split income' option.

 

[Joe_90]

What caused Revenue to write to you?

One of the conditions of Split Year relief is that you are not resident in the year after departure. From the figures you provided you would appear to be resident in Ireland under the look back test 280 days in two consequent years with a minimum of 30 days in each.

I assume you were working in the Middle East where they have no income tax and therefore have no tax to use under a double taxation treaty. There are other posters more familiar with International Tax than me they may have some more info but we always advise, if you are relying on non residency relief don't get close to 30 days in a year.

Might be too late for you though.

 

[eddieore]

Yes, I am in the Middle East.
I believe the reason for the Revenue writing was an audit of non-residency claimants, but am not 100% sure.

So my previous advice was based on the following, taken from Revenue 'RES1' leaflet:
"Tests of residence

Test 1

The first tax residence test is that an individual is regarded as resident in the State for tax purposes for any tax year in which he or she spends 183 days or more in the State.

Test 2

Where the time spent in the State in a tax year is less than 183 days, then the second test comes into play. The second tax residence test is the 280 days two-year test and involves taking account of an individual’s presence in the State, not alone in one tax year, but also in the preceding tax year. Under this test an individual is regarded as tax resident in the State for tax purposes for any year in which he or she spends a total of 280 days or more in the State in the tax year and in the immediately preceding tax year. However, this test will not apply in any year that an individual is present in the State for not more than 30 days."

So the '30 day' rule would only come into play if I had exceeded 280 days over 2 years, but had actually been resident for less than 30 days in Year 1. Then the '30 day 'rule can be applied to achieve non residency status also in Year 2.

In my case, I was resident less than 183 days in 2010 (41 days) and resident less than 280 days for 2010 & 2011 (116 days = 41 days + 75 days) days.
For 2009 I can be considered resident (251 days) but Revenue state elsewhere that you can avail of split income relief from date of departure, in my case 2009.

Anyway, thanks for your feedback, think I'll go get some more advice from a tax specialist and see where that goes.

 

[Joe_90]

I believe the reason for the Revenue writing was an audit of non-residency claimants, but am not 100% sure.

I presume you claimed Split year relief for 2009 and then they wrote to you to clarify the number of days that you were resident in Ireland in 2010. On the basis that you are resident in Ireland in 2010 they have denied you Split Year Relief for 2009 and then on that basis you are subject to Irish tax on your worldwide income for 2009 and 2010.

I don't think that the 280 day rule will apply in 2011 so you won't be subject to tax on your non Irish income in 2011.