Remittance Basis Taxation - Avoiding Inadvertent Irish Tax Exposure on Foreign Funds

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Non‑domiciled individuals who use the remittance basis should be aware of the potential Irish tax risks associated with foreign‑source savings and investment income, as well as gifts and inheritances received from abroad.

Savings & Investments

If a foreign financial institution relocates any part of its operations to Ireland—such as back‑office administration, clearing functions, or fund management—this may unintentionally create a taxable remittance for individuals relying on the remittance basis. Examples include:

1. Irish‑based operations clearing or processing funds held in your foreign accounts
2. Your investment portfolio being managed from Ireland
3. Your bank account or financial arrangements being migrated to an Irish branch or entity

Remittance‑basis taxpayers should review their foreign banking and investment structures to ensure that no inadvertent remittances arise as a result of operational changes made by financial institutions.

Gifts & Inheritances

Non‑domiciled individuals are not treated as resident or ordinarily resident in Ireland for Capital Acquisitions Tax (CAT) or Inheritance Tax (IHT) purposes unless they have been resident in the State for the five consecutive tax years immediately preceding the year in which the gift or inheritance is received.

Where both the disponer and the disponee are non‑domiciled, and the relevant conditions are met, no CAT or IHT will arise on gifts or inheritances taken at a time when neither party is resident or ordinarily resident in Ireland. However, Irish‑situated assets remain within the charge to CAT regardless of domicile or residency.

If you expect to receive a gift or inheritance, it may be prudent to review your residency position in advance.

Contact Imelda Prendergast to discuss remittance basis of taxation or international tax on 01-439 4200.

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