US Citizens Living in Ireland

Are you a US citizen now living in Ireland or are you a resident of Ireland with assets in the United States?

Navigating the complexities of international finance and taxation can be overwhelming. Choosing a financial advisor who understands the complexities of cross-border financial planning is key to navigating unique challenges and opportunities that come with managing wealth across borders.

USA and Ireland Double Taxation Agreement:

In 1997, a new double taxation treaty between Ireland and the United States was signed, replacing the existing treaty which was in force since 1951. (www.revenue.ie/en/tax-professionals/documents/double-taxation-treaties/u/usa-1997.pdf)

One of the significant changes in the new treaty was the taxation treatment of U.S. social security pensions.  All Irish resident recipients of a U.S. Social Security Pension are now exempt from withholding tax on such pensions in the U.S.  However, with effect from 6 April, 1998, all such pensions are liable to tax in Ireland, subject to the normal Irish tax exemption limits applying.

Given the close relations between Ireland and the U.S. it is not uncommon to find U.S. citizens living in Ireland or Irish Citizens returning to Ireland having worked for many years in the US.

As a US citizen or US connected person residing in Ireland you will be subject not only to Irish taxation regulations but also have a require to file and possibly pay taxes in the USA.  This requirement as set out by the IRS impacts all aspects of their financial planning.

Filing US tax returns

US citizens are required to file their US tax returns irrespective of where they are resident and are liable for taxation on all their worldwide income.

Although you may be entitled to a exemption for tax due to the Foreign Earned Income Exclusion (FEIE) which is $120,000 for 2023 or through Foreign Tax Credit (FTC) which allows you get a credit for taxes you already pay in Ireland.

Choosing the right investment provider / financial institution that can provide you with all the required tax reports in a timely manner is an important consideration.

Estate planning

As a U.S person, on death, U.S. estate tax will apply to the value of your entire worldwide estate.

For US domiciled individuals who might live in Ireland temporarily for work the position is slightly more straightforward.  The double taxation agreement with the US provides that an individual who dies domiciled in any part of the US will only be subject to Irish inheritance tax on their Irish located assets.  It should be noted that the US agreement only applies to inheritance and not to gifts so any lifetime gifts made by US domiciled but Irish resident individuals will be subject to tax in the same way as any other individual.

While double taxation rules will apply it is important that you understand your liability to death taxes and if relevant implement strategies to minimise the impact on your estate.

Cross-Border Expertise: 

Navigating the financial systems of both Ireland and the US requires a deep understanding of their regulations. I have the licenses and knowledge to provide a holistic approach to manage wealth across borders effectively. My approach is both innovative and compliant, aimed at maximizing growth while strictly following the latest tax and regulatory rules of both countries.

Summary

It is important to remember that although you are an Irish resident at this time you will continue to have U.S. tax reporting obligations and you must report all your tax obligations in a timely manner.

When developing an financial investment plan as a US connected person you need to factor in many issues including tax and investments in both countries to ensure you invest in a fully compliant and efficient manner.