UK non tax resident with UK property income

[DPA]

Hello,

My wife and I are currently UK tax residents. My wife is a US national. I am British. We jointly own a home in UK.

We intend to move to Ireland where we will remit my wife's pension from USA. We will follow the necessary procedure to revoke our UK tax residence. We intend to rent out our home in UK and leave the proceeds in UK.

My question: Do either / both of us still get the personal allowance to apply to our earnings? Meaning we will owe income tax on proceeds in excess of £12,570 or (£25,140)?

Thanks for any insight.

DPA.

[AGoodman]

I think you should both get a personal allowance.

You because you are a UK citizen
Your wife under art 22 of the UK/Ireland Double Tax Treaty

You will of course also have to declare the income in Ireland (and Ireland and the US in your wife's case).

[someone]

We intend to rent out our home in UK and leave the proceeds in UK.

It's not obvious to me whether "revoke our UK tax residence" means becoming Irish domiciled but I'd assume not and so I don't think the UK rental income will be taxable in Ireland if it stays in the UK.

The thing that might be (unexpectedly) taxed in Ireland is income and gains from ETFs (even if they're shielded from UK tax in an ISA). Also Ireland has a deemed disposal rule so you might become liable to Irish "exit tax" even if you don't sell and the Irish taxation of ETFs is "draconian" (IMO). (Other Irish domiciled stocks are also in scope but except for some special cases - where you'd need expert advice to confirm - most ETFs and mutual funds now come under the Irish exit tax regime)

[DPA]

Thanks both for your valuable input.

My understanding is that even if the UK income is declared by an Irish tax resident, it won't be taxed in Ireland unless it is remitted to Ireland. And yes, there is the US consideration..

Does the tax treaty actually figure into this scenario, considering we would be non-domicled tax residents with only foreign remitted income? (And no tax liability on world wide income).

I could be wrong but I think moving away from UK, likely temporarily, shouldn't effect my being UK domiciled (my country of birth and that of my father etc.). Am I wrong?

Thanks again.

DPA

[someone]

Moving away temporarily won't affect your domicile status. It's quite hard to change domicile and it needs to be a deliberate act.

Residency status is almost always automatically determined. You will be resident in Ireland if you spend 183 days there (IIRC) in a tax year. You will need to make sure you don't spend too many days in the UK if you want to stop being resident in the UK too. You don't get to "revoke" your UK tax residency, it's decided by a series of rules. (note that definition of spending a day in the UK and a day in Ireland is different, so it's theoretically possible to be resident in both the UK and Ireland for all 365 days of the year if you live near the NI border.)

Ireland only taxes Irish sourced income and remitted worldwide income for non-domiciled residents. But, for example, ETFs are almost always classed as Irish domiciled and so are Irish sourced income even if the income never touches an Irish bank account. UK situs property income is UK sourced income, so not taxed in Ireland unless remitted.

[DPA]

Thanks Someone.

Revoke was likely the wrong term. I meant notify HMRC that we are leaving. And yes, depending on ties, I have to be careful how many days I spend in UK to avoid taxation.

Can you comment on the UK income question? That is, if my wife and I are not tax residents in UK, can we still each apply a personal allowance of £12,570- to derive the taxable amount on UK joint income? My wife is American and I am British.

Thanks again.
DPA.

[someone]

Agoodman answered that. You, yes, you should get a personal allowance if you choose to claim it (there are reasons not to especially if you have large amounts of interest or gilt income in the UK but there may be others). Your wife I have no idea.