I am advised by the Revenue Commissioners that the determining factor in respect of the allocation of taxing rights under the Ireland-New Zealand Double Taxation Convention is the tax residence status of the taxpayer.
Ireland and New Zealand are the “Contracting States” for the purposes of the Convention.
Under Article 15 (Alienation of Property) of the Convention, gains derived by a resident of a Contracting State (Ireland or New Zealand) from the disposal of a property in the other Contracting State may be taxed in that other State in which the property is located. On that basis, whether the person concerned is a resident of Ireland or New Zealand for the purposes of the Convention at the time of the sale of the property, New Zealand will have taxing rights under the Convention in respect of any gains arising on the disposal of the property.
If the person is resident or ordinarily resident for tax purposes in Ireland then Ireland would also be entitled to tax the gain arising but would be obliged to give credit for the New Zealand tax paid in arriving at the Irish liability. However, as the property is the home of the persons concerned, they may qualify for the exemption from Irish capital gains tax in respect of the disposal of a principal private residence (Section 604 of the Taxes Consolidation Act 1997). For the purposes of this capital gains tax exemption, a principal private residence is a house or apartment which is owned by a taxpayer and is occupied by the taxpayer as their only or main residence.
A person’s tax residence status depends on the number of days they are present in Ireland during a tax year. They will be resident in Ireland for tax purposes if they are in Ireland for a total of:
- 183 days or more in a tax year, or
- 280 days or more in a tax year plus the previous tax year taken together, with a minimum of 30 days in each year.
If a person is tax resident in Ireland for three consecutive tax years, they become ordinarily resident from the beginning of the fourth tax year.
There are no Irish taxation implications in respect of the repatriation of the proceeds from any disposal into Ireland.
Finally, although citizenship is not the determining factor in respect of the allocation of taxing rights under the Convention, under Article 25 (Non-Discrimination) an Irish national cannot be subjected to any taxation or requirement in New Zealand which is more burdensome than those imposed on New Zealand nationals.