UK Ireland double tax treaty and personal allowance

[jack101]

Hi, I was wondering if it is possible to claim the UK personal tax allowance of £12570 and also the Irish tax allowance/tax credit of (I think) 18000 euros at the same time? Or can you only benefit from 1 or the other?

The reason for asking:

I am a UK citizen and have a remote working job, current income is approx £12000

I have the opportunity to move permanently to Ireland with a job earning approx 15000 to 20000 euros in Ireland.

I would be able to keep the UK job but all work for this would be done in Ireland and I would not be visiting the UK or be tax resident here.

So as above, my question is: Is it possible to have my cake and eat it? Or would the combined income be taxable in Ireland? (after deducting the tax credit/personal allowance)

I read the double taxation agreement and their is a mention of personal allowances but the language is not clear to me

Thanks in advance for replies

[darthblingbling]

I'd look at domestic legislation first, if as a tax resident of Ireland you're entitled to PA or whatever the Irish equivalent is, then you'll get one, regardless of UK position

[bd6759]

The personal allowance is set against income taxable in that state.

If you have income taxable in the UK, the UK personal allowance can be set against that UK income to determine the UK tax.

If you have income taxable in Ireland, the same applies to the Irish personal allowance. You can set it against income taxable in Ireland.

But you cannot reduce your UK taxable income with the Irish allowance, and vice-versa.

[jack101]

I understand that I would not have to pay tax twice on the same income.

But I think, if resident in ireland, all of the income would be taxable in ireland after deduction of the irish personal allowance.

I was hoping that both countries would allow the personal allowance AND not to tax the foreign income. But I don't think this "cake and eat it" scenario would be allowed.

thanks

[bd6759]

I’ve really no idea what you are trying to ask.

Are you suggesting Ireland should deduct both the Irish and the UK personal allowance from income taxable in Ireland?

[someone]

I _think_ the UK/Irish DTA taxes work "where it is done". So if you're living and working in Ireland then it's taxed in Ireland even if the work is remote and the client is in the UK.

BUT, I think there's an extra complication if the work is being done as an employee of a company based in the other state when I think then it might be taxed in the state of the company doing the employing (with further caveats to avoid people setting up companies specifically to take advantage of this)

The DTA is almost unreadable, it contorts the language to avoid naming either state. I'd suggest getting a copy and then editing it so that "resident of the other state", "contracting state" "the other contracting state" are replaced with UK/RoI as appropriate for your case - and then see if it makes more sense... (but don't bet on it!)

I have spent more than a few hours of my life trying to make sense of the UK/RoI DTA. I'm pretty sure I've misunderstood some bits and I rely on my accountant to tell me where things are taxed...

[jack101]

I’ve really no idea what you are trying to ask.

Are you suggesting Ireland should deduct both the Irish and the UK personal allowance from income taxable in Ireland?

"suggesting" or hoping. I was hoping that Uk income would not be taxable in UK (and it isn't) AND hoping that Irish income would be covered by the Irish personal allowance (and it is) but I think that the problem would be that the UK income would also be taxable in Ireland so this would take me well over the Irish tax allowance threshold

[jack101]

I _think_ the UK/Irish DTA taxes work "where it is done". So if you're living and working in Ireland then it's taxed in Ireland even if the work is remote and the client is in the UK.

BUT, I think there's an extra complication if the work is being done as an employee of a company based in the other state when I think then it might be taxed in the state of the company doing the employing (with further caveats to avoid people setting up companies specifically to take advantage of this)

The DTA is almost unreadable, it contorts the language to avoid naming either state. I'd suggest getting a copy and then editing it so that "resident of the other state", "contracting state" "the other contracting state" are replaced with UK/RoI as appropriate for your case - and then see if it makes more sense... (but don't bet on it!)

I have spent more than a few hours of my life trying to make sense of the UK/RoI DTA. I'm pretty sure I've misunderstood some bits and I rely on my accountant to tell me where things are taxed...

Thanks for your reply. I found the language confusing as well. I don't know why they can't provide links to pages where they can explain things clearly and provide some theoretical examples