uk-ireland double taxation

[funcrusherbill]

I'm retired English domiciled and tax- resident in Ireland. From 2008 the law has been changed so that my UK investment income is taxed in ireland on a remittance basis. Previously under the Double taxation treaty it was taxed in Ireland whether remitted or not, but was completely exempt from tax in the UK.
Somewhere on the web I saw a reference to a snag: the Uk government is nowgoing to impose tax if the income is NOT remitted to Ireland.

Anyone know anything about this?

[maths]

Article 6 Limitation of Relief has always denied treaty relief in source country where recipient non-domiciled and does not remit the income.

So in principle UK souce income which may be taxed at reduced rates (or not at all) under the treaty will not be so taxed if income arises to Irish resident non-domiciled indiviudal who does not remit income to Ireland.

This is a quite common approach under UK treaties.

UK source bank interest, for example, not subject to UK income tax in any case irrespective of treaty.

[funcrusherbill]

Thanks Maths: an excellent clarification. Under the old treaty Article 12 rules, my UK bank interest was automatically taxed in Ireland, whether remitted or not. Under new rules instructed by the EU, it is not taxable in Ireland unless actually remitted to Ireland. So it appears to me that commencing 2008 any unremitted bank interest would be taxed under article 6, because the Double Taxation treaty over-rides general tax law. A wretched complication.

Do you agree - or have I missed a point?

[maths]

No, I don't think you have missed the point.

Under Irish domestic law an Irish resident but non-Irish domiciled individual is subject to Irish tax on UK source income only if remitted to Ireland; previously such an individual would be taxed in Ireland whether the UK source income was remitted or not.

However, under UK domestic law UK source bank interest for such an individual qualifies as "excluded income" and thus any UK tax liability on such interest is resricted to any UK witholding tax; but an individual who is non-ordinarily resident in the UK may claim to have such interest paid "gross" by the bank ie without any UK witholding tax.

The UK/Irish double tax agreement is, and was, irrelevant to this income ie there is, and was, no need to invoke ithe terms of the agreement as no UK tax is chargeable thereon whether remitted to Ireland or not.

I am not an Irish tax specialist but where Article 6 may be relevant is as follows. Non-dom Irish resident works in UK as an employee (of Irish company). UK agrees under double tax agreement not to levy UK tax on salary and Irish levy its tax on such individual on remittance basis.

However, if individual does not remit salary to Ireland (hence no Irish tax) under Article 6 UK no longer agrees not to levy its tax, and accordingly taxes the salary.

[funcrusherbill]

Maths: thanks again. I think the recent change in the law has taken us into a new scene which is not yet totally clear, as it only applies from 1st jan 08.

[maths]

As the UK/Irish remittance issue was held to be unconstitutional under EU law there are arguments that, certainly in the UK, retrospective claims can be made to recover tax paid earlier assuming certain time limits.

All very boring !!!!