Tax Residency

You are considered tax resident in Ireland if you spend at least 183 days here per year or 280 days over a two year period.

As an Irish tax resident and Irish domiciled person you are liable to tax on your worldwide income and gains. Therefore, if you own and rent a property in a foreign country you are liable to Irish income tax on the rents you receive and Irish capital gains tax on the gain if you decide to sell the property.

In other words, as an Irish resident, no matter where your property is situated, if you receive rental income or you make a gain on the sale of your property — you are always assessable to tax in Ireland.

Taxation of Foreign Property Income in Ireland

• Treat the property as though it is an Irish investment property and take all of the relevant deductions available under Irish legislation.
• Tax the net amount at the marginal rate up to 41% (plus PRSI & Levies).
• Take a credit for the foreign tax paid.
• Record the Foreign Income received as Schedule D Case III in your Irish Income Tax Return and submit the return together with your Irish Case III calculation. Note: if you calculate a loss, this can be carried forward and set against any future Case III liabilities.

Taxation of Foreign Capital Gains

When you sell your foreign investment property you are liable to capital gains tax in Ireland on the amount of the gain at 25%. (You may also be liable to CGT in the foreign country – see below).

Capital Gains Tax – Payment Dates

For 2009 and subsequent years the tax year is divided into a revised set of two periods:

• An initial period from 1 January to 30 November
• A later period from 1 December to 31 December.

For disposals in the initial period CGT payments are due by 15 December in the same tax year. CGT for disposals in the later period are due by 31 January in the following tax year.

For example, if you dispose of an asset in the period January to November 2010 you must pay the Capital Gains Tax due to Revenue before mid December 2010. If you dispose of an asset in December 2010 the Capital Gains Tax will be due on 31 January 2011.

Foreign Capital Gains Tax Paid

In most cases, upon disposal of a foreign property you will have paid CGT in the foreign jurisdiction. Therefore, depending on whether a double tax agreement exists between Ireland and the relevant country, you should be entitled to a tax credit in Ireland for any foreign tax paid on the gain.