Hi everyone. Welcome back to the podcast. This week we're able to

share with you an episode that I recorded with Paddy Delaney of

the Informed Decisions podcast. I had a chat with Paddy in

September about ex Pat taxes and the biggest tax topics we cover in

our work and a bit of background about myself as well. We thought you might

be interested in hearing a bit from Paddy on top of our regular irish tax

content. If you like this episode, you can find more episodes of

informed decisions at informeddecisions, ie or wherever you get your

podcast from now on to the episode.

Thank you for listening to the Informed Decisions podcast with me,

Patty Delaney. Here we share insights and

ideas that we hope will have a positive and

lasting impact on you, your money, and

ultimately, let's face it, on your life. So thanks for joining me.

Enjoy.

Stephanie Wickham, you're very welcome to informed decisions. How are

you? I'm really good, Paddy. Thank you so much for having me on. It's

a pleasure. You're down in my beloved

Waterford. I went to college, spent four years of my life in

the city of Waterford. Marvelous place. It's a great

place. It's one of the best places to live in Ireland, apparently for it to

believe some recent surveys. There you go, the sunny southeast.

Stephanie, you're an award winning

international expat, tax advisor,

KPMG, chartered accountant,

tax advisor, tax specialist.

You're obviously bringing a lot of expertise

to this space. Thank you.

Yeah, I suppose. I've worked in taxes

for my entire career and both in

Australia and Ireland, so, yeah, suffice to say, I've

met some interesting people. The area of international tax

tends to have interesting clients. So, yeah, it's an

area that I really enjoy working in and it's ever evolving.

It's a big space. You mentioned you spent

time in Australia, so you were that expat moving back to

Ireland at some point, obviously, right? Yeah, yeah. Myself

and my husband, we relocated to Australia in

2011 and spent eight years there. And then

when we started a family, like most of irish couples

who go abroad, you kind of realize that maybe it's time to come

back and come back to the grandparents. So

we've been back in Ireland just coming up on five years now,

actually, over five years, six years in next February, and the

move has been a very positive one for us. Well done. I was

actually speaking to someone from Australia at the

weekend and I was

cajoling her on the fact. In my experience, Australians love to

use acronyms, much more so than any other nation. Is

that fair? It's very, very fair.

And sometimes the acronyms are actually longer than the word itself, so

the abbreviated version ends up being longer. But, yeah, we used

to. We remembered a lot of them. We've forgotten a few of them now, but

there's some. Brilliant, brilliant. They're very good, the Aussies

that kind of boiling things down to simple

terms. The one that I remember most is the

GFC, which was the global financial crisis. Right. So you moved

over there in the middle or in the midst of the GFC, as

they call it. Yeah. You know, it was really interesting because when I

was in KPMG in Dublin, I spent some time working

on, you know, Nama. So KPMG

kind of supported that agency and went

from, you know, Ireland, perhaps when I was about

21, didn't really fully appreciate the extent of what had just happened to the

country. I went Australia, to Western

Australia, where it was just like they were literally extracting liquid gold

from the ground. And, you know, salaries were high, and there

was expats moving in and out of Western Australia from

Houston and Canada and the UK, and we were working with them firsthand.

It was really interesting, I think, to see, you know, just

how different, you know, economies can be and the impact

that that would have on the work that you do as a tax advisor. We

were working, obviously, with these. With these expats directly in

KPMG. But, yeah, I went on to work in some very interesting

roles. Ultimately, before we came back to Ireland, I

was heading up an APAC division

of employees who were employed on

board offshore vessels. So the vessels would move across AIPAC,

deep sea divers who'd go down and do really interesting work, work on the seabed,

just interesting things that had no correlation to the Excel

spreadsheets we were looking at day to day. But, yeah, I've been very lucky in

my career and very grateful for the kind of opportunities that we've

had. But Perth is a different place to Ireland. Ireland's a

different place to what it was when we left. But all in all, we're very

happy to be back. And so you're running what looks

like very successful business in expat taxes,

ieinhouse. Yeah, I mean, look, that's been a bit

of a. It's been a bit of a journey,

and I like to think of it kind of as a happy accident, but

one that has taken many, many hard

work, hard work over many hours. So, broadly, when

I came back to Ireland, didn't really have a skill set that was

needed outside of Dublin and Cork, pre Covid, a lot of the

big firms didn't really want to talk to people who weren't sitting in Dublin or

Cork. And yeah, basically just found myself

in a situation where what am I going to do? And noticed on

Facebook that there were so many expats who had

questions about taxes. And, you know, very well

meaning Johnny or Joe on Facebook would answer the question. And I

kind of sit there and go, well, that's not really right. So expat

taxes was born. And I suppose as a business, we're a little bit different

to the traditional irish tax practice, as in we're digital, we're online,

you know, we have our own podcast tax. Bye for expats, you know,

newsletters, content marketing. So what we found is it's really helped us

to work with people now in over 30 countries and irish

diaspora, they're everywhere, aren't they? You know what I mean? We're such a great nation

for moving, going abroad and

yeah, we've had clients, you know, who are chartering

yachts around the Mediterranean continually to

employees in Kiribati. I didn't even know where that was until I had to

google it. It's an island in the Pacific. But

yeah, the irish, and we're not just irish people, we work with people moving to

and from Ireland, but it's been a great little niche for us. And the business

is growing sometimes at a rate we can't keep up with. So that has its

challenges, but we're enjoying it. Well done.

And so look, hence, I'm delighted to be talking to you.

Right. You seen and you see and you

guys help people who are both moving to and

moving from Ireland, right? And that happens to. On a

daily basis, I guess. Right. Don't know the numbers,

but there's obviously significant numbers. There

is. So I think in the most

recent central statistical report, there was about

net immigration of about 120,000 and

roughly the same leaving. So that annually you've got

large numbers of people. Not all of those people are going to have

complex tax issues, but most of them would at some

point go, what happens to my tax position?

And we really want to be the first protocol for those people that when they

have a question and they ask Google that, they come to our site and we

help them answer it, hopefully by way of our free blog, which we try

to provide, you know, a very consistent basis to provide free information.

But yeah, it's, it's, it's a busy space. Well

done and absolutely, I'm a fan of the blog and indeed of your podcast. So

well done. On everything that you share and the knowledge that you put

out for, for free to people. So continued success with that stuff.

So, look in terms of the practicalities for people,

I'd love to maybe look at it in terms of people

moving to Ireland or back to Ireland. So I see it on a

reasonable basis myself. People who were born here

and went and established a career, or had

a number of years working in other countries, maybe picked up other

citizenship or tax domicile

and are back, or indeed people who are moving here for the first time, whether

it's to retire or it's to work for over the longer term. So

in that case of where people are moving to Ireland,

I suppose, what are the things that people could or should be doing

in advance of it? What are the things they should be thinking

about to prepare for as smooth a transition as

possible back to Ireland?

Many things, but let's try and break them down into kind of bite size pieces.

So I think the three things to think about, how's this

going to impact my income and the tax I pay on it,

what implication does it have for the assets I hold? What capital gains

tax do I need to think about now? And in a longer term view, would

be what happens in terms of the next generation succession

planning. So I broadly, with my clients, try and break down those three

components, because each of them have different considerations.

Notwithstanding that we always have to understand with our

clients their personal situation,

which ultimately involves understanding their tax residency from an irish tax

perspective, and their ordinary residency from a tax

perspective in Ireland and their tax domicile. So just very high

level tax residency in Ireland is not the same

as everywhere. So if you look either sides of the pond to the US and

to the UK, you're going to have different interpretations of that phrase. Tax

residency in an irish context. It's basically based

on the number of days you spend in Ireland in a calendar year. So the

first thing we want to know with the client is when are you going to

become an irish tax resident? Because once we determine that, we can

understand whether we have a window of opportunity to plan for what your

tax liability might look like in future. The second thing that

we have to understand, not as relevant for people who are returning, but it

can be, is their ordinary residency status, which is

a function of their tax residency. Very simply, if somebody has become a

tax resident and they have been a tax resident for three

consecutive years, they then become an ordinary resident. And as

it takes three years to acquire it, it also takes three years to lose it.

So I can come back to that, potentially in terms of when people leave

Ireland, it tends to have a more important role

and tax domicile, you know, going back to what you said at the start

around this cohort of people who

are not the only people listening to this podcast, but, you know, generally tend to

be the people that we deal with maybe 50% to 60% of the

time, irish people who've gone abroad. So, for example, a lot of

irish clients we have who maybe in the seventies went to the

US, they've had fantastic career there, they've lived

their life, they've raised their family, they get older, they want to come back.

You probably see it routinely just kind of this

drawback home. Let's call it home because that's what it is, they're coming

home. And that can extend from, you know, the retiree

to the tech employee who maybe is gotten a bit

tired of Silicon Valley, wants to come back to Ireland to be close like we

did to family. Those people generally have an

irish tax domicile, and definitely in most

scenarios, revive it. If it has fallen dormant for whatever

reason, it becomes active again when they come back to Ireland. And that's pretty well

established under case law, both in an irish and the uk context.

So suffice to say, each of those different

tax residency, ordinary residency and domicile pieces will be different for each

individual. But until we know those pieces, we can't really

advise on the income tax, capital gains tax and inheritance

tax issues over someone's return. So probably the best

thing to say to people who've listened to that jargon

is two action points. Firstly, take advice before you come

back, and secondly, don't assume

anything until you've spoken to a specialist, because this

can be quite a complex area. On top of everything I've

just said, we then have to add the double tax agreement that might exist

between the location you're coming from to Ireland, and that can add

different nuances to us. But

notwithstanding all of that, my approach with my clients, and I'm not saying

it's the best one, because I'm sure practitioners up and down the country have their

own, is probably something that you yourselves will do paddy,

with your clients. And it's trying to understand often what the client wants, what

are they trying to achieve, what do they want when they come back to Ireland?

So, for example, a common one that comes up is a returning irish person,

or somebody moving here for the first time will often want to buy in, you

know, but the rental market is hard. Let's just buy. If we can.

And a question that will come up is, can I transfer the

proceeds of the property I've just sold in

the US UK in search country here to Ireland without an irish tax

liability or Isaac, most of the time the answer is yes, you can.

And for a few reasons. There's a relief from irish capital

gains tax on the sale of the family home. It's called principal private residence

relief, and it isn't ring fenced property sold in Ireland.

So being able to share that information with people often is a

relief. And that's really what we're trying to do is,

you know, this is a stressful move. As advisors, we tend to focus on the

figures and the semantics and the dates, but the person actually living

it is going through one of the most stressful life events, which is

packing up, coming back. How can we make this as easy as

possible and identify little opportunities along the way? Because

the irish tax system gets expensive quite quickly. We don't want to miss the

window of opportunity that you might have to take advantage of lower tax rates that

exist before you come back, possibly. And on that

topic, in terms of irish tax rates, do you guys

see a trend in terms of

general rates moving upwards, downwards or sidewards? And

again, we budget with coming up, obviously, this day, next

week, is there a general trend?

So, yeah, I suppose. Look, I mean, we can look back

to kind of the commissioner taxation report, which is a few years old

now, and some of the suggestions that were made in that seem to be kind

of making their way through to what's being proposed either in the

upcoming budget or has been transposed into recent finance acts in terms

of income tax rates. My personal view, which is based on nothing other than

guesswork, to be completely honest, is that there will obviously be the

incremental increase in tax credits. The standard rate cut off point will likely

go up again. It seems difficult in the face of a general election to

see that they wouldn't do that. When we're also talking about a cost of living

crisis, I think it's safe to assume we're going to, to see that.

And I suppose generally the budget in previous years

hasn't necessarily taken into account some of

the recommendations in the Commission for taxation report. That's nearly three

years old now. Who knows? Budgets before

general elections tend to be not

as hard hitting. So it'll be interesting to see what happens when

the budget is actually released. And any

nuggets for us or spoilers around

capital acquisitions tax, for example. Oh, look,

so a few things. And again, you

know, I suppose we'd love to see the group a threshold

increased. You know, in a lifetime, an individual

from their mother or father can receive 335,000

euro. And when you move, I mean, perhaps in certain

counties, that the value of an average house now is

in that realm. But if you're in Dublin, you can't even pass the

family home on to your kids, essentially,

without crystallizing a tax liability. So

that border between kind of what the finance

act tries to achieve, and I suppose, them trying to look

after the exchequer, it's a fine balance. I don't envy the

finance minister, but we'd like to see that. And I know that the tax

Institute would be of the same view, and they would lobby

the minister for finance in that regard. So there is hope that we'll

see that increasing, obviously, as well. There's just been the increase to the standard fund

threshold for pensions, which we saw announced last week. That's very

positive. These things,

interestingly, though, as much as they're in the micro environment

that we operate in as financial advisors, and tax advisors in Ireland,

are sometimes shocking for people who are coming from locations like

the US, where the value of an

estate can be in excess of $12 million, and no,

Uncle Sam doesn't take anything. Or you look at somewhere like the UK,

where, you know, there is no gift tax that compares to what

we have. So some of what we do for clients is educate

them on. You know, you might be irish, you probably just

worked in your local shop or garage until the age of 819, and then you

went to the US and you've never looked back or had reason to think about

or keep up with what's happened. So oftentimes for us, it's about kind of

helping to explain short lines in simple terms, because, look, tax is complicated.

You know, I'm not even an expert on every single tax question that comes

up, and that's common for tax advisors. We tend to specialize, so

we don't expect our clients to understand it, and we're kind of here to

explain it in simple way for them. Very good.

So back on those three headings, which I love, that income and tax

the assets, and then the next generation estate planning

piece. So if for people that are moving back, it's

the income and tax piece, you've covered that in those three different headings that you

need to be cognizant of in terms of the assets, then

the property, as you mentioned, there could be an exemption or

credit around that side of things, but for non

property assets, and I see it a lot is the likes of pensions. Right?

So, again, between UK and Ireland, there are

mechanisms where you can. You can bring your pension back from the

UK to Ireland if it's beneficial to do so, but for

likes of the coming from the US to here or other countries to hear,

it still seems it's not

easy and it's not even possible in a lot of situations like,

is that short sighted? Are we, is there a big piece of work there that

has yet to be done, or is that even on the radar, do you think?

Stephanie? So that's a really good question. And it's quite

topical in light of changes we've seen in recent

years. So there was a kind of a precedent that revenue had

which has expired, which allowed people to take a lump sum

from a foreign pension scheme subject to the normal rules that

we see in Ireland, where you get a tax free lump sum revenue, were quite

clear in recent years that that didn't exist anymore and, you know, it wasn't

to be relied on. So what we saw in 2023

was the introduction of section 200 A of the Taxes

Consolidation act, which essentially is a piece of legislation that's

designed to allow the exact scenario you've just mentioned. So let's use an

example. John's gone to the US. John's paid into a us pension

scheme. I used the word pension here and I'll come back to what that might

mean. And he's accrued benefits in that tax efficiently

from a us perspective, when he comes to Ireland in his retirement years

and now needs to draw on that pension scheme. First point

is the Revenue commissioners would be of the view in the first instance that he's

drawing an income and that would correspond to how pensions are taxed normally in

Ireland. The second point is this piece of legislation that was

introduced is designed to allow John to take a

lump sum from a foreign pension scheme. The important point

is what might look and act like a pension in an

irish context is not how pensions look and act in every other

jurisdiction. So section 200 A is a fantastic piece

of legislation. But if somebody is now in Ireland, they have a foreign pension,

whether it's from the US, the UK, France, Germany, doesn't matter.

If it meets certain criteria, then there is large scope

under section 200 A, if the conditions are met for a tax free lump sum

of up to $200,000 euro to be taken, and an additional

300,000 at a reduced rate of tax of 20%.

So that's there to address the issue that you've

mentioned. I just want to highlight that it's a new piece of legislation

and there can be difficulties in drawing a sufficient comparison between what a

pension is in the US. Us pensions often provide for things that irish

pensions don't. So an irish pension is generally only accessible

if you're on death's door. Doesn't always work the same in the US.

So that's an area we're actually working on quite a lot at the moment, and

that's where our clients will come to us. But let's use another

example where John knows that he has this pension and

John knows he needs the money. Now, if we have a conversation with John and

we're clear that he's not an irish tax resident, we can

advise John and say, draw down the pension before you come

back, because if you bring the money to Ireland and you're not before you're a

resident, Ireland has no taxing right under domestic legislation in

most scenarios. So John now needs to speak as us advisor and make sure he

doesn't have a big us tax bill. But that type of planning can,

can be game changing in numerous scenarios, not just in the pension

space. Excellent, excellent. And I think that's a really interesting point.

In terms of pensions in different jurisdictions

may or may not be defined the same. And I've seen

and heard cases of people moving pensions from the UK to

Ireland and subsequently moving into different structures that

aren't recognized as pension structures in the UK and can lead

to subsequent issues and potential tax bills. So

it's a very, it is a complex area

ultimately, right. And you need to make sure you're doing the right things and you're

avoiding these potential, potential, very, very

costly pitfalls, right? 100%.

I mean, we all like certainty, so

that's really what you're going to your tax advisor for. Tax advisors have to

do their best to apply the law and give that to clients. It can be

difficult sometimes, but, and. That'S an interesting point, right.

In terms of do you mentioned the word do their best?

And there seems to be a reasonably

large proportion, in my experience, of

tax law or code that is

subject to interpretation. Well, the funny thing

is, once you get to the point where you're rowing with revenue over

something, it never feels like there

was any gray area, because they usually have a very

definitive view. So if you've gotten to that

point, you'll usually be quite clear as to what their view is.

I think our taxes

Consolidation act are vast, and we've got one of the,

the largest bodies of income tax legislation

and it's vast and realistically,

you know, what happens is structures are

designed and then anti avoidance is

drafted to plug holes. To answer your

question, I think the job of a tax

advisor is to remove the greyhouse.

And this is difficult. And I'm not even going to pretend that I always have

it down to a fine art, but I remember when I worked in a role

in Australia, it was a commercial role and I was working with a

project manager who had some tax experience, but he was working with the tax

team on something. And he said to me, where you guys fall down is you

forget this one key thing. He goes, we just want you to tell us what

to do. And it really resonated with me because

he's right. And that's really what I think is the

challenge for a tax advisor is that when you find yourself in a situation

where something is gray, of course, communicate that to the client, get

a second opinion, you know, that this is not about kind of, you know, throwing

a dice and making a decision, but ultimately the job is to be able to

guide the client as to the best approach for them. If there is

some element of subjectivity. Now, there's many mechanisms by

which, you know, something that is gray can be confirmed at revenue. You could,

you know, if something's not clear in law, you can put an expression it out

on your tax return. If something is technically not published, you can approach

revenue technical services. There is ways to do it,

but ultimately, nobody likes a piece of advice

that's a bit vanilla and doesn't really give a clear way forward. So I

really try to kind of, as a team, we try, if we can, to be

clear for our clients. And so they feel like we've done our job

to the best of our ability. Nice. The final

piece in that people coming to Ireland or returning to Ireland

is the next generation. Right. And it's, again, it's something that I see quite a

lot in working with clients

is they may, through the course of

our planning or over the course of a period of time working together, they realize,

hey, there's this. This portion of our assets we're never

going to need. Right. The reality is we can stress test

this all day, we're never going to need this. So

it's an interesting one. It then throws up the thought of, you know,

giving and gifting while they're alive, as opposed to leaving it in their

estate, you know, ten or 20 years down the road. They'd rather pass

it on to their loved ones and see them enjoy it now. Right. Which I

think is a great thing to be able to do and can give

everybody great level of satisfaction, ultimately. So in

terms of that, preparing for gifting, preparing to pass

assets on for people that are coming here

where maybe their kids are not right, they might have

kids or loved ones, that they're beneficiaries in other

countries, what are the things that people can be

doing or thinking about in that regard? Stephanie?

Yes. So I suppose they probably have two options.

You gifted in your lifetime, or you wait until you're not, you know,

you're not on this planet anymore. And the

answer can really vary depending on the fact pattern. But let's

perhaps use an example, kind of similar to what you gave

there. If the kids aren't in Ireland, we definitely have more

options. And the reason for that is because the

irish gift and inheritance tax system broadly works

such that if the recipient or the

donor are resident or ordinary resident,

we have to consider irish gift and inheritance tax. So that window of

opportunity where the kids are not in Ireland and have not been for the previous

three years and are not ordinarily resident resident and the parents haven't

become tax resident yet, is a window of opportunity in any

circumstance, insofar as the assets aren't

passed under an irish will, and assume that they're going to

pass. I mean, I don't think anyone anticipates their death, so perhaps that's a silly

point. Or they're not giving irish assets so that there's a little bit

of nuance there. Get review.

I would then say we would then, and I come back to what I said

earlier. You're always asking about residency, ordinary residency and domicile.

If the client happens to have a non irish domicile,

which is possible in certain circumstances, even if they are residing in

Ireland, there is an exemption in the capital acquisitions tax acts,

which allows for a non domiciled person who has not been resident in

Ireland for five years to pass assets, gift assets,

to a non resident, non ordinary resident recipient, free of irish

tax. So to use your example again, kids not in

Ireland, someone's coming back to Ireland, they don't have an irish

domicile they can actually gift for five years. And

that's a very useful window,

bearing in mind they're also not eroding their 335,000

euro threshold that they may need in future. And

that's before we start even considering double tax agreements.

So one of the most useful ones that we

see is the US irish estate tax treaty can give rise to some

nice outcomes whereby in some circumstance,

some circumstances, non irish assets can pass free of irish

tax even when the person has been in Ireland, even if the recipient's in

Ireland. So that needs review. And then the other point to note,

we only have two estate treaties. The US

Irish one is in state tax treaty. It's very old, but

still relied on by both jurisdictions, notwithstanding, there's been changes

in law since. And the UK Irish one, which covers gift and

inheritance tax, it's broadly a credit treaty. It'll just give credit in either

jurisdiction for tax in the other. So. But aside from

that, there's no treaties anywhere. So always get the client

to think about. Okay, yeah, we're thinking about this through the lens of the irish

issues. What's the foreign issue? And so, you know, one of the

things we would always encourage clients to do is, you know,

budget for cost of decent advisors in Ireland and

the foreign jurisdiction, which. It feels painful, doesn't it? But, you know,

when you're looking down the barrel of a 33%

gift or inheritance tax rate, potentially, and before you even take into

account the foreign tax rate, it's money

well spent quite quickly if assets are of a certain value.

Absolutely. It would. You would imagine

that advice would pay for itself very quickly in the vast majority, the vast

majority of circumstances. Right. Very, very rare that it

doesn't yield multiples of

it. And you know what, as well, like sometimes I think there's an important point

as well. You don't know what you don't know. So, you

know, speaking to a tax advisor shouldn't always be

about how much money can I save? You know, that that's not the right way

to view it. It should also be done through the lens of what don't I

know here? You know, I am coming into the tax net. What do I need

to be aware of? What are my deadlines? Am I falling short of anything here?

We as advisors have to work very hard to keep up with changes. You know,

there'll be hours spent keeping up to date with the changes in the budget. So

there's an education piece there as well. As well as an opportunity piece,

which both of them have value. Brilliant. Yeah, no,

absolutely. Makes an awful lot of sense in the case of when people

are potentially moving away. Right. Maybe a Yde just tackle this in a slightly

different manner. So there's, there's guess a couple

of scenarios or questions that I've come across over the

last year that I'd love to get your thoughts on and that might

help answer some of this for people that are potentially moving

away and the nuances around

that it'd be really interesting to get your, your thoughts on that, Stephanie, if that's

okay. Right. So, so in a case

where somebody's retiring and they've been

here all their life, they've, they've full PRSI,

contributions. They've been here and working for many, many years

and are now going to retire. And part of their retirement plan

sees them living in Canada, right.

For maybe four, maybe six, maybe even seven

months of the year. Right. Because they have family over there. In

that type of scenario, is

somebody better off spending more or less time there each

year to maintain or to lose a particular

residency or

domicile or. What are the things that someone like that should

be thinking about? Their irish pensions, irish assets,

irish state pensions.

How should someone like that think about that type of a scenario?

So I think kind of a holistic answer to that question is,

if we looked at them staying in Ireland, the first question I would ask is,

what does their normal irish tax liability look like? And then we need to draw

a picture as to if they move to Canada and

Canada gets taxing rights. So that's subject to a couple of assumptions. What

does tax there look like? Because when you compare those two numbers, then you

have a figure, and that's a saving,

potentially. And, you know, we don't ever really like the tax

tale to whack the dog. But the point being

that you make an informed decision to kind of excuse the pun.

And so the first thing I would say is, if we just go through

it kind of on a line by line basis quickly, what you'll find

generally, and I pull the canadian irish

treaty, to be doubly sure, but assuming it's a

state pension, normally Ireland loses taxing rights on that.

Okay, if the individual breaks tax residency. But

what's interesting about the example that you gave is the first thing you said was

four months in Canada, that's not going to be enough to break irish tax

residency under domestic law. And the reason is because, and this is

one that's very important for people who are leaving Ireland.

Everybody, every man and his dog knows that you can be a tax resident if

you have 183 days in Ireland in the calendar year. Most people are familiar with

the 183 day rule. Rule. There's a second test that is important,

and it's 280 days over the course of two

years. So in other words, if you have four and a half months in Ireland

this year, four and a half months next year, you are still a tax resident

next year. In the second year, you remain a resident. So

what we need to determine with your client is are they going to become canadian

resident under canadian domestic law, will they break irish tax

residency? And if we've determined that it kind of. Sorry to

hark back to my point at the start, we always need to know

the residency, ordinary residency in Thomas hopies. We can then look at the double

tax agreement. But broadly, there can be,

I mean, if someone said to me, canadian tax rates lower, I'm in

Ireland, I've got, you know, I've got income in excess of the age income

exemption, which is currently 18,000 euro for a single person, and I've

got irish assets. And you'll find that Ireland will, you

lose taxing rights on some of those. So the state pension generally

goes once the person breaks residency. And irish

situate assets such as irish bricks and mortar. And so,

you know, irish rental property and irish income tax on

the rental income. Always, never, ever going to get away from that. You sell

that asset unless it was the family home or subject to some

other exemptions, CGT on it, any growth. And

so what you'll find is the opportunity to kind of, I

suppose, potentially leave the irish tax net

can come with pensions. Probably one main point

to mention there with a, you know, a non state pension would be ArFs

don't leave the irish tax net easily. So if you

have had the option to purchase an ARF with your pension,

you'll find Ireland will keep taxing it regardless of where you are subject

to. I think there's four jurisdictions where there might be scope to kind of take

it out of the irish tax net fully. It's a complicated one,

but at the end of the day, as you can see, it's a bit complicated.

And then we would look at things like dividends, where Ireland will potentially keep

some taxing rights. Interest will generally be taxed in the state

residency. It varies. And that's probably one thing

that I find common. Clients will come on a call with us and they'll

say, but there's a double tax agreement. I've already paid taxes,

or I can't be taxed twice, or

I'm going to be there. So I don't have to pay tax. In Ireland, it

doesn't work like that. You have to look at the income type,

you have to look at the residency of the person receiving it. You have to

look at the source of the income or the asset. Those are the things that

determine how double tax agreements work. And unfortunately, there isn't

a one line answer to double tax agreements.

Interesting. I don't know if that answers your question, Patty, I think it just raised

more questions. That's usually how these things go.

Right. But at least you know what you need to. You need to know. Right,

exactly. There's a bit of digging to be done and bit of figuring out in

that particular case, and that's purely from a tax

perspective. And as you mentioned, if you're looking at it holistically as well, where do

you actually want to be? Right. Where do you want,

I think, is usually the place to start. Right. And then take it from there.

If there's going to be a major financial advantage to

staying seven months versus four months, for example, then that

might. It might influence you to do so. But then again, it might not.

You might say, well, you know what I'm happier doing, form once here,

form once there, or whatever the case may be. And, you

know, it's funny what you say, because, you know, clients will work very hard, and

they'll use their money, and they'll go and maybe buy themselves a nice holiday or

a nice car. But we rarely think about,

you know, the luxury of living in a country as

being the value of the tax that we pay to do it. And I often

say to my clients, you know, there can sometimes be this feeling of, I'm

going to run for the border because my tax bill would be lower. But you

hit the nail of the head. That run for the border through Dublin

departures at, like, 06:00 a.m. on a red

eye flight when you wave goodbye to your kids. That. That. That's

expensive emotionally. And so I'm not

saying pay tax at any cost, but I'm saying, you know,

we have to approach this practically. We want to save money. We want to be

smart, but we also want to be realistic about what people can actually do. Life

is short. You want to live your life as you want, not

just, you know, cheaply from a tax perspective. Yeah, absolutely.

Yeah. What's your priorities? Right. And another case in point

is the portuguese non habitual tax

residency. There was a lot of talk around that earlier this year, I think

it was, and potential changes. So right now,

where does that sit for people? Can you tell us, Stephanie, in terms of what

can or can't be done realistically at this point? Yeah, that's a

really good question. Okay, so complete disclosure here. We have had very few queries

on it in recent time because it's not as popular now. I can't

even remember the last time we got a query. It was a couple of months

ago. The last time I looked at it, and I'm not going to pretend to

be completely o fa with any recent changes. The

scheme still exists, but my understanding is

that the criteria are stricter and now it's being

designed to incentivize, particularly workers

who have specific skills to come. Whereas

before it was a bit more open. So

it's not that NHR is gone, it's just it seems to be less

applicable to a broad range of people. And as a result, now, of course, there

was grandfathering and there was, if you got in under the certain rules, you were

fine. That window is closed. So my advice to anybody

looking or thinking about Portugal is familiarize yourself with where

you sit within the criteria. We partner

with a tax attorney in Portugal who specializes in it, so

very happy to kind of make referrals there if it's helpful. What we've kind

of found in light of the changes in Portugal is people looking

to other jurisdictions. So again, and I know we said

before we started to record, you know, I'm an irish advisor. I don't advise on

foreign tax, but broadly, I'm aware of, you

know, Italy has some concessional schemes designed

to incentivise people to live in certain parts of Italy. And Spain

has the fairly well publicized Beckham law, which can apply to employment

income in certain situations. And I think Croatia

has some preferential tax schemes. I know Cyprus has.

So I suppose what we found is, you know,

these jurisdictions, and notwithstanding the fact that the UK is

just rolling back its non Dom scheme, which is basically taking away

its, I suppose, appeal

as a place for certain taxpayers to go across

Europe, we see different types of schemes that are

essentially inviting people to go and live there

and enjoy a lifestyle, have a specific

tax outcome. It is very, very important that the

client who is looking at that gets advice in the foreign

jurisdiction from a locally qualified tax advisor or tax attorney

and an irish one, because there's issues on both sides,

and the ordinary residency piece that we mentioned at the start that really now

comes into play when somebody's leaving. Tax residency is relatively easy

to break. You're staring down the barrel of Ireland domestically, having

a three year taxing right on everything except yours,

your employment and your self employed income once you break

residency. So we really need to think about that for clients

who are looking to go offshore. But it can be done. I am of the

view it works best when somebody does it and commits to it.

And what I mean by that is when clients want to,

you know, summer initially, Christmas

in Ireland, Easter in Ireland. You know, it gets, if you're spending

a long amount of time in Ireland, you know, you really need to be moving

there. It works particularly well when people are severing a connection with Ireland, say for

holidays, down to the personal circumstances of the individual.

Okay. One other thing I wanted to ask you

if you have seen or had experience of is,

is a US specific tax and it's federal estate tax.

It's something that I've written about and I've shouted from

the rooftops about. I have yet to see an actual

read or hear an actual case where this is applied. So this is

where irish residents have us

Cetus assets. So whether that's stock in Google or Apple or

whatever, over that $60,000 value, potential

federal estate tax on debt of the actual

capital of the asset, never mind potential inheritance tax

passing down. Have you seen cases

of that being applied by Uncle Sam?

No, I haven't, in honesty. But I would share

your view that this is something that is spoken

about. I'm not an expert on

how foreign tax offices share information.

They don't really publish how it works, but we know, whether it

be faTca or I or the comment reporting standard, that there are mechanisms in place

now where, you know, we look at what AI can do for us from our

humble computers. Of course federal tax office is

going to have the ability to analyze and drill down and

I would be of the view that, you know,

that's definitely something to be aware of. And the

funny thing is, is that we can sometimes see these things

being addressed in waves. So what I mean is something that

can lie under the radar for years can come to the forefront of

a revenue authority's view and then they will go after it.

So, for example, in Ireland, we've recently seen that

RTSO. So tax on share options, a lot

of revenue intervention in recent months, a lot of revenue activity,

a lot of case officers being kind of determined to close

out cases quickly. So my point is, no, I have

not seen it. And it would probably be in the realm of a us tax

advisor more than an irish one anyway. But the point would

be that if there's an issue

there, burying your head in the sand is a

very risky approach to take because if it does

emerge in future, it's a lot harder to deal with these things when they were

seven, eight years ago versus one year ago. Yeah. So, but it's

definitely in, in. I've seen it written about, um, and I haven't heard

from other advisors. It's, it's come up, but it's hard to see how it hasn't

somewhere or won't in future. True. Um,

yeah. So get the house in order, perhaps if it's a. If it's a potential

issue for you. Um, okay. Brilliant. Like, there's.

There's so much in all of this, Stephanie. There's. You

could pick any particular avenue topic that we've touched on there

and you could drill down into it, and hopefully this has given a reminder to

people or a few ideas to people or prompt to

people if they are thinking of going this way or

that way and how they can start to think about it. Ultimately, I think,

is certainly our objective.

Just on that point. Paddy, one thing I would

love to drive home as well is what we find is clients, they

get really stressed about this because it is very stressful.

But I think it's important to kind of highlight that. You know, what's

unknown is frightening. Often when you start to broach it, it isn't as bad

as you think it's going to be. So I just want to mention that point

because it is overwhelming to hear all this jargon. When you break

it down to your personal circumstances, there's probably opportunities,

and there's always routes to rectify issues,

if there has been any in the past, and. So probably won't be as bad

as. Yeah. As you thought it might be. Exactly. It's a bit like. Hopefully not.

I find it's like going to the dentist. I'm still terrified of dentists,

and I hate going, but when I go, it's like, what was I

worried about? Like, they're. They're so much better than they used to be. Right.

It's. Was that. That feeling when you stand up

out of the dentist chair, it's relief. Relief. That was.

That was actually. Yeah, I enjoyed. It was lying down for half an hour. It

was grandma.

So if you do, it's not like pulling teeth. Let me just. I'm not

making that comparison. Oh, I tell you. I don't know. It feels like

it sometimes puts that

exactly. Okay, look at it. One thing I ask

every guest on the podcast for is a book

recommendation. Right? So this is putting on the spot now. So it doesn't have to

be a. It can be fact, fiction, a

biography, but just ultimately a book that, for whatever

reason, stands out for you, that you.

That you would say, hey, this was. This was a book I really. I really

did enjoy. Anything come to mind? Steph in the hot spot.

Okay. No, don't worry. I said

this is a boring business kind of recommendation. But for anybody,

business owners and trying to think. So, I suppose, you know,

for us, the challenge as your business grows

is you kind of get thrown from this space of trying to

be an expert, subject matter expert, too.

You've got a business now and you've got HR issues and you've got this and

you've got that. How do we grow? And one thing I read recently, what I

really enjoyed was no rules. Rules. It's the story of Netflix

and how they really ballooned.

So they basically took over. It was one of the video stores

that went to the wall, and Netflix just.

Its growth was exponential. I know, we all know that. But what it goes into

is the way that the company operates. And I think

regardless of the size of your business, there's some really great little

takeaways about. I am a big believer in

nothing changes if nothing changes. And some of the

success of this business has been built on, you know,

just kind of look and a happy accident. But

also, how can we challenge the norm and do things slightly different? And I

think success for small businesses lies in looking to some of

these big companies that have done things in a. You know,

they probably invested a lot of money in coming up with these concepts, and it's

distilled into that book. So, yeah, if anyone can't fall asleep on a Saturday

night and read a couple of chapters, hopefully you'll find it

interesting and it might help you. Not off, but I enjoyed it. Excellent. Excellent.

That's a. Sounds like a great recommendation. I hadn't come across it before. I have

read stuff about Netflix, but no, I never came across that book. So I'd

definitely give that one a look myself. They definitely are innovators.

They do things a bit differently. Is that. Is that a fair. Oh,

oh, 100%, like, pretty? I mean, if anyone in the

HR space reads it, they're going to be like. But, yeah, I enjoyed it.

Brilliant. Well, Stephanie Wickham from expat taxes,

ie, presume that's the best place for people to find out more about what you

hope. Expataxes, ie, there's a contact

us form. My assistant is Grania.

Graniaxpataxes. She's the woman who makes it all happen. If you've got a

question or you need help with something, our blog is there

and our podcast. We're easy to find in the virtual realm

and perhaps harder in reality. But,

yeah, drop us a note and we'll make a connection if needs be.

Good. Anya, Stephanie, thanks a million for your time today. Thank you so

much. Thanks again for

joining me on this week's episode. As you

know, this podcast is for information

purposes only and is not

individual financial advice. We always

suggest engaging a professional and indeed

regulated financial advisor before making decisions

with your money, investments, and retirement planning, because,

let's face it, it's just too important to do anything else.