1. Income Tax
Under the provisions of Section 73 TCA 1997, the remittance basis of assessment did not apply in respect of UK source income. However, Section 73 ceased to have effect in respect of UK income arising on or after 1 January 2008 (see Section 18 Finance Act 2008).
2. Capital Gains Tax
The remittance basis of assessment also applies in respect of the foreign chargeable gains of non-domiciled individuals (The remittance basis of assessment for foreign chargeable gains never applied to Irish citizens not ordinarily resident here).
Under the provisions of Section 29(4) TCA 1997, the remittance basis of assessment did not apply in respect of UK source chargeable gains. However, under the provisions of Section 42 Finance (No.2) Act 2008, the remittance basis of assessment applies to chargeable gains arising in the UK as and from 20 November 2008.
3. Current Issue
Section 18 Finance Act 2008 and Section 42 Finance (No.2) Act 2008 do not have retrospective effect. However, arising from certain matters contained in a recent tax appeal case, Revenue are prepared to examine – on a case by case basis and subject to the statutory 4-year time limit for claiming repayment of tax – claims for repayment of tax where it is claimed that a repayment of tax would be due had the remittance basis of assessment, rather than the arising basis of assessment, applied for a relevant year of assessment in respect of an individual’s UK source income and/or chargeable gains.
A submission may be made to the individual’s relevant Revenue office. Such submission should contain all relevant details as regards the income and chargeable gains assessed and the amount of remittances in respect of which the claim refers.
Note 1 – With effect from 1 January 2006, the income of a non-Irish sourced employment (including UK sourced employment) attributable to the performance inthe State of the duties of that employment is chargeable to income tax under Schedule E and the remittance basis of assessment does not apply in respect of income within the charge to income tax here under Schedule E.
Note 2 – The UK source income and chargeable gains of an Irish resident individual relieved under Paragraph 3 above will, if remitted to the State during a future tax year, be chargeable to tax in that future tax year (assuming that the individual is tax resident here in that future tax year).
Note 3 – Where a lesser figure of UK source income or gains is assessed, the credit previously granted in respect of UK tax paid on such income or gains will also have to be reduced to reflect the lesser figure assessed.