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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 15751
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have a tax related question I would appreciate some help

Customer Question

Good Morning, I have a tax related question I would appreciate some help with. I'm a UK National working part time currently as an airline Captain for an Irish Company. My only permanent residence is in the UK, where my wife and children live. I only travel to Ireland to work, always home in the UK on days off. I'm trying to work out the nuances of the DTA between UK and Ireland and my desire would be to pay tax in the UK and not in Ireland if possible. My reading of the DTA leads me to think that i'm resident in the UK by virtue of being a UK resident and having my centre of vital interests there. I have been filing HMRC tax returns for the past 8 years claiming foreign tax credit for PAYE tax paid in Ireland without any problems, but my tax liability would be lower if I could pay tax in the UK.
Further, I believe i am resident in Ireland for tax purposes by virtue of working for an Irish company with HQ in Ireland.
Submitted: 1 year ago.
Category: UK Tax
Expert:  Tony Tax replied 1 year ago.

Hi.

Let me take a look at this and I'll get back to you.

Expert:  Tony Tax replied 1 year ago.

Hi again.

If you look at Artilce 15 of the UK/Eire tax treaty, paragraph 1 says that to the extent that the job is done in Ireland, the earnings will be taxable there as well as in the UK unless all of the conditions as set out in paragraph 2 are met which they are not. The airline is based in Eire (b).

If you were tax resident in Ireland, your worldwide income would be taxable there. If you were tax resident in both the UK and Eire at the same time, then the tiebreaker at Article 4 of the tax treaty would come into play. I don't believe that you are tax resident in Eire based on what you have told me. Take a look at the notes here.

I hope this helps but let me know if you have any further questions.

Expert:  Tony Tax replied 1 year ago.

Hi again.

If you look at Artilce 15 of the UK/Eire tax treaty, paragraph 1 says that to the extent that the job is done in Ireland, the earnings will be taxable there as well as in the UK unless all of the conditions as set out in paragraph 2 are met which they are not. The airline is based in Eire (b).

If you were tax resident in Ireland, your worldwide income would be taxable there. If you were tax resident in both the UK and Eire at the same time, then the tiebreaker at Article 4 of the tax treaty would come into play. I don't believe that you are tax resident in Eire based on what you have told me. Take a look at the notes here.

I hope this helps but let me know if you have any further questions.

Customer: replied 1 year ago.
Thanks for the reply. Although I am working 4 days on, 4 days off, with 35 days annual leave, I maybe in Ireland for less than the prescribed 183 days for the first year, making me non resident for the current tax year. The second test though, looks at 280 days in the current and preceding year, which is a more difficult test to pass. I have recently returned from a working secondment in the UK, (UK tax etc) from 29/10/13 until 05/10/15, so i believe as i haven't been paying tax in ireland for the past 3 years I will not be ordinarily resident, my case for non residence may work for this year and maybe next. I was hoping to use the tie breaker in the DTA to my advantage to get an exclusion order from the Irish Revenue, and pay tax by self assessment to the HMRC.
Customer: replied 1 year ago.
My working pattern may change going forward, taking me over the 183 days per year, and then i'd be resident without question. For the period July 2006 until i started the UK secondment in Oct 2013, I was declared resident in Ireland for tax, and paid via PAYE, as well as fulfilling the HMRC requirement of filing a UK tax return every year claiming credit for the foreign tax paid in Ireland. I also understand through recent research that I have been eligible to claim Mortgage Interest relief in ireland for my UK property. I have not, to date, claimed this and was wondering if a backdated claim may work?
Expert:  Tony Tax replied 1 year ago.

The tie-breaker is only used for dual residence taxpayers. It's not used for a taxpayer who is only taxable in a country on income arising in that country. It's also not a clause that can be used to escape from a commonly used tax principle, ie that income earned in a country can be taxed in that country even if the employee is not tax resident there.

I cannot help you with the question on tax relief for your mortgage interest as I'm not an expert on Irish tax I'm afraid. In the UK, there are time limits for making backdated claims so I suspect the same applies to Eire.

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