Ireland: Destination Ireland - Issues To Consider Before Relocating

Last Updated: 7 June 2018
Article by John Gill and Paraic Madigan

We've listened to and read various commentary over the past 18 months as to the opportunities that exist for Ireland Inc in the context of Brexit and companies who as part of their Brexit contingency plan, look to move part of their global operations to Ireland.

Inevitably as part of this matrix, the ability to relocate key employees comes into focus.  Often missing from the narrative is the personal impact of relocation for those employees.  Independently, Ireland has long been a new home for people relocating here for lifestyle reasons, notably, from the US but also from EU jurisdictions and more recently from further afield including China who have been attracted by Irish culture, the way of life and our education system.

John Gill examines some of the key issues people need to consider when relocating to Ireland.

The Right to Reside

For EU / EEA nationals, their ability to live and / or work in Ireland is straightforward.  Their right to relocate and reside here derives from the fundamental freedoms enshrined in EU law.  As part of Brexit negotiations to date, it has been indicated that the longstanding Common Travel Area between the UK and Ireland which allows citizens of the two jurisdictions to live and work freely in the other jurisdiction will continue to apply post Brexit.  However, for all non-EEA nationals moving to Ireland, they must obtain permission to remain in the State for any period over and above the short stay 90 day visa.  When relocating for work, the right to reside will be inextricably linked to an employment permit granted by the Department of Business Enterprise and Innovation.  This often comes in the form of a Critical Skills Permit and entry visa and separate permission to remain in the form of a stamp endorsement in their passport.  Such stamps indicate a type of immigration permission and the conditions attached to it.  The stamp endorsement for critical skills applications generally comes in the form of a Stamp 1 or Stamp IV.  The nature of the stamp endorsement will dictate if your time in Ireland will also constitute reckonable residence for the purposes of a subsequent citizenship by naturalisation application.

For lifestyle relocators from outside the EEA, typically their right to reside requires proof that the individual has an independent means of wealth and by their presence, they will not become a "burden on the State".  They are typically granted a Stamp 0 endorsement which must be renewed annually.  Although this does provide some flexibility for the relocating individual moving here for lifestyle reasons, it does not provide the security of long term residence status.  Accordingly our experience indicates that such persons look to the immigration incentive programmes offered by the Government, namely the Immigrant Investor Programme and the Start-Up Entrepreneur Programme.  It is important to note that in each case, these programmes do not confer citizenship but do grant a long term right of residence for successful applicants, with actual residence in Ireland under the programmes constituting reckonable residence for a subsequent citizenship by naturalisation application.

Tax

Once you have established your right to reside in Ireland, you need to understand how you will be taxed when resident here.  Without elaborating too much on the core Irish tax constructs of domicile and residence, typically a non-Irish (non-domiciled) individual who is tax resident in Ireland, is taxed on what is known as the remittance basis of taxation which means that they are taxed on Irish source income and Irish capital gains as they arise, but only on foreign income and gains to the extent that such income / gains are remitted into the country (with some limited exceptions).  This provides a very favourable tax deferral basis unlike the position that applies for Irish resident and domiciled persons, who are taxed on an arising basis on their worldwide income and gains wherever located.  If structured correctly, the remittance basis will mean income and gains on investments (e.g. a foreign investment portfolio) held outside of Ireland will not come within the charge if  the person is here on a short term basis.  The remittance basis does not apply to employment income, where the duties of employment are exclusively exercised in Ireland.  However, there is relief for relocating executives in the form of the Special Assignee Relief Programme ("SARP").

Whilst taxation in respect of a personal income source is relatively straightforward, the landscape for high net worth individuals moving to Ireland who have structured wealth is entirely different.  By structured wealth, we are referring to individuals who prior to their residing in Ireland, have established either offshore trusts or corporates to hold and protect their wealth for the long term.  When it comes to taxing offshore wealth, there has been a significant change in the Irish tax environment over the last number of years.  Under Irish tax legislation, there are specific anti-avoidance rules, the purpose of which (arguably when first created) was to attribute the income and gains of offshore structures to Irish resident and domiciled individuals.  Over the past number of years, these anti-avoidance provisions have been extended in most cases to apply in respect of Irish tax resident individuals regardless of their domicile status and as recently as 2017, there have been further changes to the "motive defence" which offers a carve out to the application of these provisions in certain circumstances.

The impact of these tax changes therefore demands careful planning by resident non-domiciled individuals prior to relocating to Ireland and establishing tax residence here.

Quite apart from the above required income / capital gains tax planning, one of the often overlooked consequences for non-domiciled persons becoming resident in Ireland is that, after five consecutive years of tax residence, any subsequent gifts or inheritance that they receive may fall within the charge to Capital Acquisitions Tax which is a combined gift / inheritance tax regime.  There may be an out, depending on the nature of the assets and timing of benefit, if the disponer concerned is domiciled in a state of the United States, but this is specifically a function of the way that the Irish / US Inheritance Tax Double Tax Treaty operates.  Unfortunately, it is the case that there are only two such treaties that Ireland has that deal with inheritance tax, one being with the US and one being the UK and so therefore the primary domestic charge to Capital Acquisitions Tax can arise for any other foreign individuals, once they have been long term resident in Ireland.  Again, it merits careful planning to overcome this issue.

Practical Relocating Issues

Once a person has secured their right to reside and once they have planned properly from a tax perspective, other issues they will need to consider include where they will live and where their children might attend school.  Many people who move here are confused with the nuances of the Irish property system, one example being that the asking price is very often simply a statement of intent rather than the sale price actually sought.  Further for residential letting, although strides have been made in regulating the market, the letting market often appears less sophisticated than some of its European counterparts such as Germany where the culture of letting is more firmly established.  It is important therefore for people to get legal advice on the implications of any such purchase / tenancies to ensure they are appropriately structured or provide the most flexible secure arrangements the tenant requires.

Schooling can also be a major concern.  Ireland has one of the youngest populations in Europe with this resulting in a drain on the public school system.  Indeed the private school system for primary to secondary level education is already heavily oversubscribed with competition for places very severe.   One of the criteria for children to be admitted into a school in Ireland is based on their residential address.  Children are expected to be living within a certain mile radius of the school they apply for, which in turn impacts on where a family may choose to reside long term.

At Matheson Relocation, we work closely with a dedicated partner, to address these and other practical issues including the co-ordinating of banking, insurance and private healthcare arrangements.

Concluding Remarks

Ireland has and will continue to attract foreign direct investment and by implication Dublin and the other urban centres in Ireland will continue to be a home for relocating executives.  Indeed, on the wider level, it is the experience of this writer that Ireland continues to be a favourite destination for individuals to relocate to for lifestyle reasons.  Over the last number of years, we have seen people decide to move to Ireland because of concerns about geo-political risk in other jurisdictions and this issue is not confined to the more exotic jurisdictions.  We need to look no further than the UK with Brexit as an example of the impact of political decision-making on private wealth and corporates.

Where people do decide to relocate, inevitably there will be a wide range of questions to be addressed.  At Matheson Relocation our goal is to address the full range of issues to make that transition seamless.  For further information on this please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions