Subscriber OnlyYour Money

Moving back to Ireland from the UK: What red tape and taxes will we face?

Q&A: There are plenty of reliefs for people moving here permanently, but being organised will help you avoid falling into a web of confusion

Moving home from abroad can be great, but make sure you focus on the necessary paperwork to avoid financial headaches down the line. Photograph: iStock
Moving home from abroad can be great, but make sure you focus on the necessary paperwork to avoid financial headaches down the line. Photograph: iStock
Dominic Coyle's picture
Dominic Coyle
Tue Feb 14 2023 - 05:15

We moved back to Ireland from England last summer. I’ve been working since in Ireland even before that, and my husband started a job here shortly after our return. Before that, we had been living and working in the UK for the previous nine years.

We are selling our English home and hope to buy in Ireland. Our UK house has been our principal private residence for five years and we have been staying with parents in Ireland. I don’t think we should be subject to CGT as it is our PPR and we haven’t rented it, but we are tax residents in Ireland now.

What are the steps we need to take in Ireland and UK regarding PPR relief? We also have savings in our UK account. Will that be subject to tax?

Ms CC, email

READ MORE

People worry a lot about moving money across national boundaries when they relocate for work or some other reason. Headlines about Revenue clampdowns on “offshore assets” often add to the general confusion.

Ironically, you are likely to have more red tape issues with bringing a car over from the UK than in dealing with your savings.

The good news upfront is that you will not have any tax issues to worry about. Britain has a similar arrangement to Ireland where people are allowed to sell their family home – their principal private residence in officialspeak – without any liability to capital gains tax regardless of any increase in value over the time they owned it.

As you refer to in your letter, the situation would be different if you had rented the property out for some of the time, but you say you haven’t. So there is no capital gains tax in Ireland or in the UK.

You might be nervous about the fact that, by the time you sold, you were non-resident; but I gather you get a CGT exemption for the last nine months of ownership, which more than covers that.

However, there will be some paperwork. You will need to file a capital gains tax return in the UK to keep your affairs in order even though there is no tax due. As you will be tax resident here in the year it is sold, you will similarly need to file details in your next Irish tax return, even though, again, there is no tax due.

With your savings, there is nothing to stop you bringing them across to Ireland on the assumption that they all derive for previously taxed income or income that was not liable to tax. The only issue with “offshore assets” for Ireland’s Revenue is with money that should have been taxed but never was.

Your bank can send the money over to your new Irish bank by Sepa (the Single European Payments Area) to which the UK retains access despite Brexit. You might get a better exchange rate with a specialist foreign exchange service, but that’s a matter up to you.

Then we come to the car. Normally, importing cars to the Republic from the UK can be a paperwork-heavy and taxing process, with vehicle registration tax (VRT) providing an unwelcome additional cost. However, there is a dispensation for people who are relocating to the State. Unsurprisingly, this comes with some rules.

You have to have owned the vehicle personally – i.e. no outstanding hire purchase or credit arrangements other than a normal personal car loan – for at least six months before moving here, and all tax and duty due in the UK must have been paid. You have to bring it over within 12 months of moving here. If you sell it on within a year of arriving, it will fall due to VRT.

To claim the VRT relief, you need to submit a Transfer of Residence application form to the National VRT Service. Revenue advises that this be done within seven days of the car arriving here to allow you to register it, as you are obliged to, within 30 days of arrival with the National Car Testing service – for which you’ll need to book an appointment.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice

READ NEXT