Residence of Individuals, Section 152 Finance Act 1994

[as amended by Section 169 FA 1995]

Background

Under the provisions of Section 152 Finance Act 1994 [as amended by Section 169 Finance Act 1995], individuals who are no longer resident but who remain ordinarily resident are taxable as if they were resident in the State. However, the provisions of Section 152 Finance Act 1994 do not apply to:

• Income from a trade or profession, no part of which is carried on in the State
• Income from an office or employment, all the duties of which are performed outside the State
• Other income of an individual which in any year does not exceed £3,000.

Queries have arisen as to whether the £3,000 referred to above means “other income” or “other foreign income”.

Revenue View

The Revenue view on the matter is that the other income not exceeding £3,000 referred to in Section 152 Finance Act 1994 [as amended by Section 169 Finance Act 1995] means other foreign income not exceeding £3,000.

Example

Mr. Murphy is not resident but is ordinarily resident in the State for 1995/96. His income for that year is as follows:

Employment income

£25,000 [all the duties of the employment were performed outside the State]

Deposit interest

£2,000 [arising to a foreign bank account]

Rent from Irish property

£5,000 [profit rent]

Mr. Murphy is chargeable to tax in the State only on the Irish source [rental] income of £5,000.

If however, the foreign deposit interest was £4,000, Mr. Murphy would be chargeable to Irish tax on the rental income of £5,000 plus the foreign deposit interest of £4,000.

Note 1

Section 52 Income Tax Act 1967 is not affected by Section 152 Finance Act 1994 and the charge to tax of the Irish source of income remains unchanged.

Note 2

Paragraph 4.A.(ii)(a) of leaflet RES 1 [Sept. 1995] should be noted accordingly.