I have a friend who is considering accepting a job move from the United States to Ireland. She has received a number of stock options while working for her company in the US and also, separately, owns a number of shares. If she sells these shares and/or stock options after arriving here in Ireland in order to buy a house, would that sort of income, received abroad, be taxed by the Irish Revenue or by the Revenue in the US? If the first applies, how would it be taxed?
Mr A.G., e-mail
I have to say that the situation regarding stock options depends totally on the terms of the contract to buy those options. If they are part of an employee share ownership plan, they may be entitled to a more lenient tax treatment than otherwise, but that would depend both on the terms of the plan and the tax treatment of such plans in general in the US.
On the broader subject of the tax treatment of stocks and shares bought and held abroad but sold while working in the Republic, the situation is somewhat clearer.
When your friend arrives in the Republic, she will be liable to Irish tax on any income earned here even if she is not resident here for tax purposes. In parallel, she will receive tax allowances for that portion of the year she spends here.
Once she is resident in the Republic for tax purposes, the net is spread wider. She can choose to declare residency upon her arrival to work here but, in any case, she will be deemed to be resident here for tax purposes if she spends 183 days or more in the Republic in the current tax year.
The result of this is that she will be liable to tax in the Republic on all income earned in the Republic and Britain and on any foreign income remitted to the Republic. This is so even if she is only resident but not domiciled here - the situation your friend appears to be in although domicile is a tricky issue. In this instance, suffice to say that domicile would widen the net further on income which might be taxed in the Republic to include all income worldwide, regardless of whether it is remitted to the Republic.
In the situation outlined above, your friend would certainly become liable for tax on any income from shares and, quite probably the stock options, repatriated to the Republic to purchase a house.
Telecom flotation
I am an Irish citizen currently residing in San Francisco. I wish to invest in Telecom's IPO. I can get no information on the date, how to apply, what stockbroker to use or general information regarding the price. I have checked the website, but to no avail. Could you help me?
Mr D.O'D., e-mail
Telecom Eireann will no doubt be delighted to hear that individual investor interest in its flotation or initial public offering (IPO) is already vibrant, even beyond home shores. Unfortunately, your problem is that you are just running ahead of the process.
As of now, no precise date has been set for the IPO although the best guess is June or July. Similarly the mechanisms involved in and conditions relating to applying for shares has yet to be finalised.
What is known is that the public will be asked to pre-register their interest in acquiring shares. The Government announced last week that every house in the Republic would be sent a mailshot from April 22nd onwards, followed by an intensive advertising campaign. While a pre-registration does not create a commitment to purchase upon flotation, the Government and its advisers have said that those who pre-register will receive priority when it comes to the allocation of shares upon flotation.
No price has yet been set, not even a guide price, and the recent turmoil on the board shows how many factors can be involved in determining that. Currently, Telecom is on the verge of embarking on a series of investor roadshows in the Republic, Britain and the US to influence institutional investors on its worth. I imagine any decisions on price will await the feedback from this exercise and an examination of market conditions at that time. Your best bet in terms of information is to stay tuned to the Telecom website or, even better, The Irish Times newspaper on ireland.com.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, Fleet Street, Dublin 2 or email to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.
