With unemployment hitting 14% we have seen a return to the ‘80s, with thousands of Irish, both young and old, boarding planes to all corners of the world in search of opportunity. Sadly many have been out of work for some considerable time, others simply looking for a better, more secure future.
If you emigrate or relocate with your job you should be aware of the possible tax implications. Those emigrating will generally check how much tax they will have to pay in their new host country. However you should also consider how long you will remain within the Irish tax net.
In the year of emigration you may still be resident for tax purposes in Ireland and as such all of your income remains taxable in Ireland – except employment income that is subject to what is known as “the split year treatment”. Foreign sourced income (excluding employment and self employment income) in excess of €3,810 pa will remain chargeable to Irish tax until you are non-resident in Ireland for three consecutive tax years.
Depending on where you go there may be relief available if Ireland has a “Double Taxation Agreement” (DTA) with your new host country. The purpose of a DTA is to prevent income and gains being taxed twice. For example, the DTAs Irelands has with the UK, US and Australia give relief for tax paid in the country in which you are no longer resident.
In most cases if you were employed, only had PAYE income, and paid tax in the year of emigration, you may be entitled to claim a refund of Irish tax paid for that year if you have not fully used up your tax credits.
Part 2 of this blog next week will cover rental income and sale of property while you are abroad.
This article is intended solely to highlight some tax implications of emigration and should not be relied on as a substitute for seeking professional advice. For further information contact McLaughlin McGonigle, St Helens, St Oran’s Road, Buncrana, Co. Donegal. Tel +353 (0)74 9321420 / Fax +353 (0)74 9321421/ info@mlmg.ie
