Income tax
I am currently working for a British company, which has recently opened an Irish office. I am permanently residing in Ireland and have been paying Irish taxes up until March 2000, when I made the move to my current company. I am paid in sterling and pay British taxes and I need to find out if I will also have an Irish tax liability at the end of each tax year.
Ms D.C., e-mail
To tell you the truth, I find your situation very confusing. You are working and resident in Ireland, but paying British taxes. It makes no sense to me. I am pretty sure that you will face an Irish tax liability at the end of the year though.
The situation with income tax and liability in this jurisdiction is that the key element is residence. If you are resident here, you are liable to pay income tax on any income earned in Ireland, regardless of whether you are paid in pounds, sterling or carrots. Indeed, you are liable to pay Irish income tax on income earned in the UK, wherever it is held, and on any other foreign income if you bring it into this jurisdiction.
If you are domiciled here - and domicile is a different legal state than residence - you are liable to pay Irish income tax on all your income, wherever it is earned and regardless of whether you bring it into the State.
I am not even sure why you are paying British taxes, but if your employer is not returning you for tax in this State, you need to check that you are covered under PRSI arrangements.
AVCs
I have just read your Q&A on above. I have been informed by my employer that I can pay £150 per month into AVCs but, on questioning where this money would be invested, I was told it is just placed on deposit "in the local". I am 43 and hope to retire about 57. I do not think that this is a good investment, even though I am entitled to tax relief. On further questioning regarding where the monies are invested, I was told that nearly all the current personnel availing of AVCs were a short number of years from retirement and would not gain any benefit from any investment product. Do I have a right to question or have a say in where these monies are invested in this private scheme?
Mr P.K., e-mail
It is very difficult to answer pension queries with such limited information. To start with, I am not sure where your employer gets the figure of £150, but it would depend on what you are already paying into any company or other pension scheme - the maximum allowed for tax-relief purposes is 15 per cent.
Having said that, I am totally confused about your employer's response. It is true that those taking out AVCs tend to be nearer retirement, but this is more due to the shortsightedness of the young than anything else. It is also true that the trustees of any pension fund have a duty of care to the members of the fund and that they must ensure there are adequate monies in the fund to pay the benefits due to any pensioners drawing on the fund.
However, I still fail to understand why money would be "placed on deposit in the local". One only has to look at deposit rates available at institutions around the State to see that it would be very hard not to lose money in such circumstances. After all, the deposit rates available are, and have been, below the rate of inflation. In other words, unless your employer has managed to sweet-talk their bank into offering an incredibly generous deposit savings rate, the money will actually decrease in value with each passing year and that is no good to anyone, particularly if they are close to retirement.
You also mention this private scheme, a phrase that totally confuses me. If it is a private and personal scheme, you have every say in what is happening to your investments because you are paying personally for the investment. If, as is more likely, you are contributing to a central, companywide AVC fund, or possibly even one that is part of the company's main occupational pension fund, you still have a say.
Any member has the right to receive certain information on an annual basis from the fund trustees regarding pension fund performance. In the light of the information given to you, you would also have a right to approach the trustees for information. If you are still not satisfied - and I have to say, you would want a lot of convincing in the light of what you have already been told - you are entitled to contact the Pensions Board, which polices pension funds.
Bacon report
I am trying to locate a copy of the third Bacon report over the Web. Would you have any idea where I can obtain this?
Mr T.M., e-mail
Getting a copy of the report on the Internet is closer to home than you might think. Indeed, the online service of The Irish Times - ireland.com - has a full version in PDF format together with an executive summary. The full report can be found at http://wwwireland.com /newspaper.special/2000/bacon/baconreport.pdf.
It's just as well, as I haven't had any luck tracking down a copy of the report on the Government websites, although I am sure one must exist. The report was compiled for the Department of the Environment and Local Government and its site at www.environ.ie does appear to have copies of the previous two reports and may in time have the third.
Unfortunately the Government's site www.irlgov.ie, true to the stereotype of Civil Service bureaucracy, has one of the most user-unfriendly search facilities known to humankind. Look for anything and it drowns you with every passing reference in an exercise to ensure you concede defeat.
In any case, the relevant bits of the third Bacon report are enshrined in the second Finance Act 2000 and that is on the Internet - again on the Government site -together with an explanatory memorandum and list of main features.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 11-15 D'Olier Street, Dublin 2, or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.
