I'm a Romanian citizen (soon to be Irish as well) living in Dublin since 2008.
Since March 2008 I became a sole trader (self-employed) in Ireland. Every year I fill in the form F11. From March 2011, I am also an employee in Ireland.
I read recently about the deadline of May 1st for offshore revenue. I am not sure if I will have to declare anything to the Revenue in Ireland in relation to three issues:
– a Romanian bank account, which most of the time is empty. I used it when I had income from Romania for self-employment – and declared everything to the Revenue. Should I declare it to the Irish Revenue even if there is no profit from it?;
– a life insurance policy in Romania, into which I pay around €350-€380 a year. It is currently worth about €4,000 but I am not earning anything from it? If so, will it be taxed in Ireland and how much?;
– I recently sold my family home in Bucharest for a small sum and will use all the money for a deposit for a first-time buyer home in Ireland. Should I declare this selling to the Revenue? Will it be taxed? Mr CR, Dublin
You are one of the many people from other countries now living in Ireland who have been in touch with me over recent weeks about the issue of the Revenue crackdown on income or revenue-generating assets held abroad.
Obviously, for many people who have come to this State in recent years, there is a strong likelihood that you will have bank accounts, property or pensions in the countries where you previously lived.
It is great that you are looking to settle here and become an Irish citizen. And, like so many “new Irish”, and indeed immigrants everywhere, you are clearly juggling several jobs to make ends meet as you establish yourself in this country.
The good news for you is that I do not think the Revenue action will be an issue for you at this time. The deadline for voluntary or qualifying disclosure to the Irish Revenue under the offshore income and assets clampdown passed last Thursday, May 4th (it was extended from the earlier May 1st deadline because of the bank holiday).
In relation to your three questions, on the bank account you hold in Romania, you only have to tell Irish Revenue if you have earned interest on the money in the account. If you have no interest, there is no need to tell Revenue. The money you put into the account before you came to Ireland is a matter for the Romanian tax authorities and you have declared that to them already.
If you were earning money in Romania after you became tax resident in Ireland, you should have declared that on the Form 11 for the relevant year, which you tell me you have filed, as it would be subject to income taxes in Ireland.
On the second issue, the life insurance policy, you also do not have to tell Irish Revenue until it starts being paid out to you. Now you are paying into it and the money you are paying comes from the income you earn from your jobs and this has all been declared first to Romanian revenue and now to Irish Revenue as part of your Form 11 or your PAYE income.
If it was an investment fund rather than a life insurance policy, the rules would be different.
Finally, on the sale of your family home in Bucharest, in Ireland there is no tax on what they call your “principal private residence“ – that is, your family home. Assuming this is your home and not that of the broader family – your parents, for example – and it has not been rented out to anyone since you moved to Dublin, there is no tax due.
If it was rented out, you would have a potential capital gains tax bill. Either way, given that you have only just sold the property, it is not an issue for the May 4th offshore assets deadline. If there is a capital gains tax due, you must declare it on a Tax Form CG1 and pay any tax owed by December 15th, 2017.
One word of warning: you talk about bringing the money from the sale of your Bucharest home over to Ireland to pay for a deposit on a first-time buyer home in Ireland. There are some incentives for first-time buyers – both under Central Bank lending rules and the help-to-buy scheme. However, if you have ever owned a property anywhere else – not just in Ireland, and not even only in the European Union – you do not qualify now as a first-time buyer. In your position, you will not be seen in Ireland as a first-time buyer.
To claim first-time buyer status could leave you in trouble with the Irish Revenue down the line as new automatic exchange of information between Ireland and other countries, including Romania, means they will learn that you owned this Bucharest property.
- Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
