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. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.
Property
A few years before we got married, my husband purchased a house in Dublin, which is now our family home. He continues to pay the mortgage on the house on his own, and my name does not appear anywhere on the deeds to the house, or on mortgage payments etc.
We are now thinking of buying a second-hand house to use as a holiday home in Kerry, where I am originally from. If I were to buy the house in my name and pay the mortgage myself, would it be considered a second home, considering that I don't really "own" a first home? Does the fact that I am married to a homeowner mean that I would have to pay the 9 per cent stamp duty and the 2 per cent annual tax on second homes? We were planning to let the property out in the first few years. Would this make any difference?
Ms N.W., e-mail
As I think you probably know yourself, the scenario you outline is probably such a sweet deal everyone would be at it if it were possible.
The advice I have been given has been confusing in terms of whether, theoretically you would qualify as a first-time buyer or not. The Revenue, strangely, says you might, but advice from elsewhere says not. In any case, it is somewhat academic because you will only be treated as a first-time buyer if you are purchasing a house that you intend to use as a principal private residence and you clearly are not in such a position.
As such the property is almost certain to be treated as a second home and you will face the increased stamp duty and the anti-speculator's 2 per cent tax for the first three years of ownership.
Letting the property by itself will not alter the situation. However, there is relief available to registered landlords. Registration brings certain responsibilities too, so you would need to contact the local authority and determine just what these are. Primarily, of course, registration is designed to ensure that rental income is returned for tax, whatever you may hear.
Wills
I am 68 and recently retired here from the United States. I have children residing in both countries. I have made my will in the US. Where will it be operative? It includes a home in Ireland and securities and life assurance in the US.
Ms C.H., Mayo
According to the Revenue Commissioners, when considering which tax jurisdiction will take precedence, the main issue is residence. It says that the jurisdiction in which the will was drawn up does not come into it nor, necessarily, does the jurisdiction in which the assets are located. It is where the person disbursing them resides for tax purposes that matters.
However, I have to say that every time a question about cross-border wills crops up, I am assailed by contradictory opinions. The truth is that such cross-border wills are complicated both in how they are structured and how they are executed. You would be well advised to take the time and consult a lawyer specialising in the area.
Rental income
I am based overseas but have rental income from property in Ireland. When my Irish tax liability is computed, will I benefit from personal allowances? If so, as I am married, will I get a married couples' allowance?
Mr J.M., e-mail
The simple answer is no. Either you will be an Irish resident for tax purposes in which case you will already be getting your personal allowances on your other income or, as I imagine is the case, you are resident elsewhere for tax purposes. If the latter is the case, you will be receiving whatever personal allowances you are entitled to under the tax system of that jurisdiction.
Given the above, the question of married couples' allowances doesn't apply.
On the issue of tax on Irish rental income for people living outside the State, I said this income was taxed in Ireland regardless of residence. This is true, but it may also be taxed in the country of residence - as is the case with the UK. What happens is that one receives a tax credit in the state of residence on the tax paid.
However, this relief is paid on the lower of the taxes paid in each jurisdiction - in other words, the landlord will pay tax at the higher rate applicable in either state. As such, you could have a tax liability in the jurisdiction where you reside on rental income which has already been taxed in Ireland, depending on the tax rates in both states and their application of any double taxation agreement.
Such property owners would also need to remember to return such rental income and tax liability in Ireland on the tax returns in Ireland and their state of residence for tax purposes.
US investment
I will be relocating to Ireland in the next month from the United States. I have a stock portfolio and retirement investments here in the US. If I transfer these assets to Ireland, will I be subject to capital gains tax when I sell?
Ms G.P., e-mail
In general, you will pay capital gains tax - currently at 20 per cent - on investment gains at the time of sale on any such assets apart from those in recognised pension funds. In the case of pension funds, when the assets are drawn down, you would be liable to income tax at the appropriate rate depending on your total income.
What you would need to do is to check the protocol for the transfer of such assets between US jurisdiction and Irish jurisdiction. You don't indicate how near retirement you might be, but a number of returning emigrants or retiring US citizens simply leave their retirement assets in the US and draw down on them from here.
Depending on the type of pension, you would pay income tax here or in the US. There are double taxation rules to avoid your being hit with the same tax bill in both states.
