An Irish Times guide to the world of personal finance.
Domicile
Is there a difference between residency and domicile? And, if so, are there tax implications? For instance, I am British, but came to Ireland to work a dozen years ago. I shall probably be here a few more years, but eventually hope to return home. So I am certainly resident in Ireland, but is it possible my domicile is in Britain?
Someone suggested to me that this could be so and, therefore, any income I earned outside of Ireland, was outside of the Irish tax regulations (and presumably, in my case, subject to British tax regulations). In which case, can I claim back the tax I have paid over the years to the Irish Revenue Commissioners on my British unit trusts? (Money that has never been moved out of Britain.)
M.D., Dublin
There is a difference between residence and domicile and it does have tax implications - But that is where the easy bit ends. The concept of domicile is an arcane legal one and determining domicile is something that may have to be run past your lawyer. In simple terms, domicile is generally where you feel to be your home. It is unchanging even though your residence in tax terms can change often. Generally it will be your country of origin or that of your family. Domicile can change but it would be rare for that to happen and, even if it did, it would be almost unheard of for it to happen more than once for any individual. It sounds to me, as a layman, that your domicile would be British - you are from there and you do intend to return there.
If you are domiciled and tax resident in Ireland, you pay Irish income tax on all your income worldwide. If you are resident here but not domiciled or "ordinarily resident", you will pay Irish income tax on all Irish and British income, and any foreign income brought into the State.
If you have been resident in Ireland for tax purposes for three successive years, you will be deemed to be ordinarily resident here from the start of the fourth tax year. You would seem to fall into this category. It might interest you to know that once ordinarily resident, you remain so for three years after leaving the State.
As someone who is ordinarily resident you would pay tax on worldwide income unless you were tax resident outside the State for the year in question, in which case any income coming from your job abroad, plus about €3,800 of other income will be exempt from Irish income tax.
If you were neither resident nor ordinarily resident here, you would be taxed only on income coming from Irish sources.
It strikes me that your friend was confusing your status and assumed you were tax resident but neither domiciled nor ordinarily resident. However, even if true, it would still leave you liable to tax on any British income.
As it happens, I believe you would be considered ordinarily resident and would be taxed in Ireland on worldwide income.
Reinstatement
I made a claim for water damage on my householder insurance policy with EBS. The claim was promptly settled by the underwriter after an inspection of the damage by a loss adjustor for the company. It was immediately followed by a letter from EBS informing me that, following a recommendation by the loss adjustor, the building cost for reinstatement in the policy was being increased from €130,000 to €200,000 - with a consequent hefty rise in the premium.
The policy was taken out less than one year ago with a mortgage and the reinstatement cost was set after a valuation carried out by EBS. That figure (€130,000) conforms to the most recent guidelines issued by the Society of Chartered Surveyors. Is this a penalty for making a claim - a kind of loss of no-claims bonus?
What is most frustrating is the lack of any meaningful response or explanation from the building society and the underwriter, Allianz, in the intervening period. After being fobbed of by both with the excuse that it was in the others hands and that they were following standard procedures, it seems that the position is that it is the policy holder (which includes EBS as lender) who sets the reinstatement value. Therefore, as long as the sum insured is sufficient to cover the lenders interest in the property, it does not (or should not) concern them what the sum is set at.
This much seems to have been acknowledged in my conversations with various customer service agents (they do not it seems like to correspond in writing) and by the fact that they have agreed to reduce the reinstatement sum by €30,000, which has resulted in the annual premium dropping by €120.
Representatives from Allianz, including the loss adjustor, did at least address my concerns and attempt to explain how their procedures operate. However, I am most disappointed at EBS, which was not only non-responsive but reacted only after much calling and follow up calling by me. And never, as I said, in writing.
Mr V.B., e-mail
There are several issues here, most of which revolve around what would seem to be shoddy customer service, particularly on the part of EBS. What worries me most is your assertion about the reluctance of your mortgage lender to deal with you in writing.
As to the core of your argument, I think you are missing one important fact. Whatever about the EBS or any lender protecting their security, the loss adjuster will be commissioned by the insurer, in this case Allianz, and not by EBS. If they felt the house needed readjustment, that is what they genuinely felt, right or wrong.
You say the original rebuilding estimate was arrived at through a valuation and survey carried out at the time of the purchase for EBS and it was in line with the Society of Chartered Surveyors estimates.
The first thing to say on this is that the surveyors figures are expressly only for guidance purposes and do not take any special circumstances or features abut your particular property into account. You also need to remember that this was carried out by EBS and its only interest in the property is the security of its loan.
The loss adjustor is, in fact, acting in your interest as the insured to ensure there is enough cover to have the house rebuilt should the worst occur. However, it is strange - even with recent inflation in the construction sector - to see the sort of adjustment to the reinstatement cost that you have been cited.
At the end of the day, ensuring the property is adequately insured for full reinstatement is your responsibility. As someone who has also had their reinstatement value adjusted upwards by a loss adjustor following a recent claim, I would suggest that one is better being safe than sorry - without being ripped off, obviously.
There are lots of mortgage lenders out there and the EBS is not, at the moment, the most competitive. If it cannot provide a basic level of customer service, I think you should look elsewhere.
Vodafone
In relation, to the sale of Vodafone shares, raised last week in this column, several readers have contacted me to point out that Vodafone offers a share purchase scheme through the Bristol office of registrar Computershare. The maximum number of shares which can be sold via the service is 1,000 and there is a flat fee to sell which is €19 (deducted from the proceeds of the sale).
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 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.
