Cross Border Taxation - Marion Shannon & Co Ltd Irvinestown Fermanagh/title> <meta name="description" content="advice on cross border taxation issues relating to the south and north of Ireland."> <meta name="keywords" content="accountants, shannon, associates, tax, county fermanagh accountant,cross bordeer tax, tax ireland, taxation UK, consruction taxation uk, ireland construction tacxation"> <meta charset="utf-8"> <meta http-equiv="X-UA-Compatible" content="IE=edge,chrome=1"> <meta name="viewport" content="width=device-width, initial-scale=1, maximum-scale=1"> <link href='http://fonts.googleapis.com/css?family=Lato:300,400,700,900' rel='stylesheet' type='text/css'> <link href="//maxcdn.bootstrapcdn.com/font-awesome/4.2.0/css/font-awesome.min.css" rel="stylesheet"> <link rel="stylesheet" type="text/css" href="css/bootstrap.min.css" media="screen"> <link rel="stylesheet" type="text/css" href="css/magnific-popup.css" media="screen"> <link rel="stylesheet" type="text/css" href="css/font-awesome.css" media="screen"> <link rel="stylesheet" type="text/css" href="css/animate.css" media="screen"> <link rel="stylesheet" type="text/css" href="css/style.css" media="screen"> <script> (function(i,s,o,g,r,a,m){i['GoogleAnalyticsObject']=r;i[r]=i[r]||function(){ (i[r].q=i[r].q||[]).push(arguments)},i[r].l=1*new Date();a=s.createElement(o), m=s.getElementsByTagName(o)[0];a.async=1;a.src=g;m.parentNode.insertBefore(a,m) })(window,document,'script','//www.google-analytics.com/analytics.js','ga'); ga('create', 'UA-74378816-1', 'auto'); ga('send', 'pageview'); </script> </head> <body>  <div id="container">  <header class="clearfix"> <nav class="navbar navbar-default navbar-fixed-top" role="navigation"> <div class="container">  <div class="navbar-header"> <button type="button" class="navbar-toggle collapsed" data-toggle="collapse" data-target="#bs-example-navbar-collapse-1"> <span class="sr-only">Toggle navigation</span> <span class="icon-bar"></span> <span class="icon-bar"></span> <span class="icon-bar"></span> </button> <a class="navbar-brand" href="index.html"><img src="images/shannon-logo5.jpg"></a> </div>  <div class="collapse navbar-collapse" id="bs-example-navbar-collapse-1"> <ul class="nav navbar-nav navbar-right"> <li><a class="active" href="index.html">Home</a></li> <li><a href="about-us.html">About Us</a></li> <li><a href="services.html">Our Services</a></li> <li><a href="privacy-policy.html">Privacy Policy</a></li> <li><a href="contact.html">Contact</a></li> <li class="search drop"><a href="#" class="open-search"><i class="fa fa-envelope"></i></a> <form class="form-search"> <a href="mailto:marion@marionshannonandco.co.uk">Click to send an Enquiry</a> </button> </form> </li> </ul> </div> </div> </nav> </header>   <div id="content">  <section class="page-banner-section blog-banner2"> <div class="container"> <div class="row"> <div class="col-md-6"> <h2>CROSS BORDER TAXATION AND DOUBLE TAXATION</h2> </div> </div> </div> </section>   <section class="blog-section single2"> <div class="blog-post single-post"> <div class="container"> <div class="post-content"> <div class="post-content-text"><br> <p>Many clients approach us asking for advice on taxation issues relating to the south of Ireland. Because Fermanagh is a border county, many residents live in Fermanagh and perhaps work in southern Ireland, and sometimes vice versa.</p> <h1>Residence and Domicile</h1> <p>Which country an individual resides in generally determines which country's tax regime applies to them. A taxpayers residence, ordinary residence and domicile have important consequences when determining whether the individual is liable to UK taxation or not. An individual is considered to be resident in Northern Ireland for a given tax year, if he is present in N.I. for 183 days, or he makes substantial annual visits to N.I. Generally, an N.I. resident is liable to UK income tax on his UK and overseas income. A person acquires a domicile of origin at birth. An N.I. resident who is not domiciled in N.I. is liable to UK tax on overseas income, only if that overseas income is returned to N.I.<br><br> An individual who is not resident in N.I. is liable to UK income tax only on income arising in N.I. In general, non-residents are not entitled to tax-free allowances, also known as personal allowances. It is possible for an individual to be resident in two countries under the general law in both countries. In such cases the residence of the individual is further determined by other tests such as where he habitually abodes, and the location of his permanent home.<br><br> Double taxation agreement In some cases it is possible that the tax regime of two countries may apply to an individual. If an individual is taxed in two countries, the double taxation agreement between the two countries allows for credit to be given at the lower of the two rates for tax suffered in one of the countries. This serves to reduce the burden of taxation to a reasonable level, since it would be unfair to tax an individual twice on the same income. Double taxation relief is given to taxpayers in their country of residence, by way of credit for tax suffered in the country where the income arises. Any foreign tax suffered is deducted from the UK tax liability, but the relief cannot exceed the UK tax on foreign income. This means that the individual will not get a refund, and so tax is suffered at the higher rate of the two countries.</p> <h1>Special rules apply for the Construction Industry</h1> <p>An individual operating within the construction industry definition may be deemed resident in southern Ireland if they spend 183 days or more on any one site. Once again the double taxation rules apply, when this happens. Construction industry firms or individuals may register for VAT, register as an employer and obtain a C2 in southern Ireland also.</p> <h1>Special rules apply to Schedule E employment</h1> <p>Where an individual is resident in Northern Ireland and working in southern Ireland, that person is normally taxed on the earnings in the country where he is employed. He may only be taxed on the earnings in N.I. if he is not deemed to be resident in southern Ireland. Once again the double taxation rules would be followed, and the country of residence is most important, in determining which tax jurisdiction applies.<br><br> Rules for foreign income of UK individuals An example of foreign income of N.I. residents, would be where a person who is resident in N.I. has a rental property in southern Ireland. Taxpayers resident and domiciled in N.I. are subject to UK tax on any non-UK income arising. Where an individual is resident in N.I. but not domiciled in N.I., that individual is subject to UK tax only on income he remits back to N.I. Taxpayers who are resident and domiciled in N.I., and receive a pension from abroad are subject to UK tax on just 90% of that pension. Capital Gains Tax and the disposal of assets Individuals are liable to capital gains tax (CGT) on the disposal of assets situated anywhere in the world, if for any part of the tax year in which the disposal occurs they are resident or ordinarily resident in N.I. If a person is not domiciled in the N.I. but is resident or ordinarily resident in N.I., gains on the disposal of assets situated outside N.I. are subject to UK tax only to the extent that the proceeds of the sale are remitted to N.I. If a gain made on the disposal of an overseas asset suffers taxation in another jurisdiction, relief is available in N.I. against double taxation, under the Double taxation agreement.</p> <h1>Companies doing business with other countries</h1> <p>Similar to individuals, the residence of a company determines which tax jurisdiction applies to that company. A company is resident in N.I. if it is incorporated in N.I., or if it's central management and control is exercised in N.I. An N.I. resident company is subject to UK taxation on its worldwide profits. A non-UK resident company will be chargeable to UK corporation tax if it carries on a trade in N.I. through a branch or agency here. If an N.I. resident company makes investments abroad it will be liable to corporation tax on those profits also. Similar to individuals, a Double taxation agreement exists for relieving double tax suffered. A non-resident N.I. company is liable to corporation tax on its profits arising in N.I., if it has a branch, agency or permanent establishment in N.I.</p> </div> </div> </div> </div> </section>  </div>   <footer> <div class="container"> <div class="footer-widgets"> <div class="row"> <div class="col-md-4"> <div class="widgets"> <h1><img src="images/shannon-logo6.jpg" alt="shannon associates irvinestown" width="220" height="50"></h1> </div> </div> <div class="col-md-5"> <div class="widgets"> <h2>CONTACT US</h2> 11 Mill Street, Irvinestown,<br> County Fermanagh. 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