How Non‑Domiciled Tax Structures Impact Irish Investors Abroad

Introduction

Ireland’s non‑domiciled (non‑dom) tax regime has become a cornerstone of wealth planning for high‑net‑worth Irish expatriates and investors with assets abroad. By allowing foreign income and gains to be taxed only when they are remitted to Ireland, the structure can dramatically reduce an investor’s Irish tax bill while still providing access to the EU market and a stable legal environment.

This article explains how the non‑dom regime works, the latest legislative updates (2024‑2025 Budget), and the practical implications for Irish investors who own overseas property, hold foreign securities, or run businesses outside the State. It also offers actionable steps to ensure compliance and maximise tax efficiency.

1. The basics: residence, domicile and the remittance basis

Concept	Definition	Irish tax consequence
Tax residence	≥ 183 days in a tax year or 280 days over two consecutive years (including the “look‑back” rule).	Residents are taxed on worldwide income and gains, unless they claim the non‑dom remittance basis.
Domicile	The legal “home” where a person intends to remain permanently. It is not the same as nationality or residence.	Non‑domiciled persons retain foreign domicile even while resident in Ireland, provided they maintain a genuine connection to that foreign home.
Remittance basis	Taxation of foreign income/gains only when the money is brought (“remitted”) into Ireland for personal use.	Foreign income left offshore is tax‑free in Ireland; Irish‑source income is always taxable. No annual “remittance charge” (unlike the UK).

Key point: There is no time limit on using the remittance basis in Ireland, unlike the UK’s “deemed domicile” rule after 15 years of residence.

Approximate size of the non‑dom cohort

Revenue does not publish exact figures, but industry estimates (RSM, Saffery, and the Irish Tax Institute) put the number of non‑dom individuals at 15 000–20 000 in 2024, representing roughly 0.3 % of the adult population but a disproportionately large share of high‑value assets (average net worth €2.3 million per non‑dom).

2. Why non‑dom status matters for overseas property investors

2.1 Rental income

Scenario	Irish tax treatment
Irish‑source rent (e.g., a Dublin flat)	Taxed at marginal rates (20 % for most earners, 40 % for higher earners) plus PRSI.
Foreign‑source rent (e.g., a Spanish villa)	Taxed only when the net rent is remitted to Ireland. If the rent stays in a foreign account, Irish tax is nil.
Mixed‑fund accounts (single account holding both Irish and foreign rent)	May trigger deemed remittance of foreign rent; advisable to keep separate accounts.

Practical tip: Open a dedicated offshore bank account for all foreign rental receipts. Transfer only the amount needed for personal expenses to Ireland; the remainder can stay invested offshore tax‑free.

2.2 Capital gains on property disposals

Irish‑situated property: CGT at 33 % (subject to reliefs).
Foreign property: CGT is only chargeable on the portion remitted to Ireland. If the proceeds are reinvested abroad (e.g., buying another overseas asset), Irish CGT can be avoided.

Example: An Irish investor sells a French apartment for €500 k, makes a €150 k gain, and reinvests the entire amount into a Luxembourg fund. No Irish CGT arises because the gain was never remitted.

2.3 Capital Acquisitions Tax (CAT)

CAT (inheritance/gift tax) applies after five consecutive years of Irish residency, regardless of domicile. The 33 % rate kicks in on the sixth year unless a lifetime exemption (€400 k for children, €100 k for siblings/parents) is available. Planning the timing of residency and the receipt of gifts is therefore critical.

3. Recent legislative changes (Budget 2024‑2025) that affect non‑dom investors

Change	Effective date	Impact on non‑dom investors
Extension of the “look‑back” rule to 360 days	1 Jan 2025	Makes it slightly easier to qualify as resident, potentially pulling more investors into Irish tax scope.
Increase in the CAT exemption for direct descendants	1 Jan 2025	Lifetime exemption raised to €500 k, easing the burden on families receiving overseas property.
New anti‑avoidance rule on “mixed‑fund” accounts	1 Apr 2025	Any account mixing Irish‑source and foreign income will be deemed a remittance unless a formal segregation is documented.
Double Tax Treaty (DTT) update with Spain and Portugal	1 Jul 2025	Reduces withholding tax on rental income from 19 % to 15 % and introduces a credit mechanism for foreign CGT, improving cash flow for Irish investors.
Introduction of a “Non‑Dom Reporting Form” (NDRF)	1 Oct 2025	A simplified electronic filing requirement for declaring remittances above €50 k per year. Non‑compliance may trigger a €5 k penalty.

Takeaway: The 2025 budget tightens the definition of remittance but also provides higher exemptions, making careful record‑keeping essential.

4. Practical steps for Irish investors abroad

4.1 Establish and maintain a clear domicile claim

Document foreign ties – property deeds, family residence, voting registration, and bank accounts.
Avoid “deemed domicile” triggers – do not acquire Irish‑situated assets (e.g., a primary residence) that could be interpreted as a permanent home.
Seek a formal domicile opinion from a tax adviser every 3‑5 years.

4.2 Segregate income streams

Use separate bank accounts for Irish‑source and foreign‑source income.
Keep offshore brokerage accounts in the name of a trust or personal holding company if you wish to keep gains offshore.
Avoid “mixed‑fund” accounts after the 2025 anti‑avoidance rule.

4.3 Plan remittances strategically

Goal	Recommended approach
Cover living expenses	Remit only the amount required for rent, utilities and personal consumption.
Reinvest foreign gains	Transfer funds to a foreign investment vehicle before bringing them into Ireland.
Pay Irish tax on foreign income voluntarily	Consider a “voluntary remittance” to claim foreign tax credits and avoid future disputes.

4.4 Leverage Double Tax Treaties

Check treaty rates before receiving rental or dividend income.
File for treaty relief (e.g., Form 11‑D in Ireland) within 30 days of receipt to claim reduced withholding.
Use foreign tax credits to offset Irish tax on remitted income, ensuring the credit does not exceed the Irish tax liability on that income.

4.5 Stay compliant with the upcoming NDRF

Keep a remittance register (date, amount, source, purpose).
Use the Revenue e‑File portal to submit the NDRF by 31 January following the tax year.
Retain supporting documentation (bank statements, invoices) for at least seven years.

5. Comparison with the UK non‑dom regime

Feature	Ireland	United Kingdom
Remittance charge	None	£30 k–£60 k annual charge after 7 of the previous 9 years of residence
Deemed domicile rule	No time‑limit; only if domicile of choice is acquired	Applies after 15 years of residence (or 20 years for UK‑born)
Anti‑avoidance	Simpler; focus on mixed‑fund accounts	Extensive “Statutory Residence Test” and “GAAR” provisions
Treaty network	71 DTTs (incl. EU, US, AUS)	100+ DTTs, but complex tie‑breaker rules
Capital gains on foreign assets	Taxed only on remittance	Taxed on worldwide gains after 15‑year deemed domicile

Bottom line: For Irish investors, the Irish non‑dom regime is generally more straightforward and cheaper than the UK counterpart, especially for those who intend to stay in Ireland long‑term.

6. Common pitfalls and how to avoid them

Pitfall	Consequence	Mitigation
Using a single “mixed‑fund” account	Automatic deemed remittance of all foreign income → unexpected Irish tax bill.	Open dedicated offshore accounts; request a “segregated fund” statement from the bank.
Failing to claim treaty relief	Double taxation (foreign withholding + Irish tax).	File the appropriate DTT claim within 30 days of receipt; keep certificates of residence.
Holding Irish‑situated offshore funds	Gains become Irish‑source and lose remittance benefit.	Prefer non‑Irish‑domiciled funds; if unavoidable, consider a “Irish‑entity” structure to isolate income.
Not filing the NDRF after €50 k remittance	€5 k penalty + potential audit.	Set calendar reminders; use Revenue’s online filing tool.
Assuming CAT exemption forever	After 5 years of residency, CAT applies on worldwide gifts.	Review residency timeline annually; consider gifting before the fifth year or using trusts.

7. How to structure an overseas property portfolio for tax efficiency

Incorporate a holding company in a low‑tax jurisdiction (e.g., Malta, Luxembourg). The company owns the foreign property; dividends to the Irish investor are treated as foreign income and remain offshore until remitted.
Utilise a “self‑managed trust” for rental cash flow. The trust can receive rent, pay expenses, and distribute only the net amount you choose to remit.
Consider a “mortgage‑interest deduction” in the foreign jurisdiction. Irish tax law allows deduction of interest on foreign loans only when the loan proceeds are used to acquire Irish‑source assets; however, the interest expense can still reduce foreign taxable profit, lowering the amount you may later remit.
Plan exit strategies: When selling, either reinvest abroad (no Irish CGT) or use a “roll‑over relief” via a qualified Irish‑resident company to defer CGT.

Conclusion

Ireland’s non‑domiciled tax regime offers Irish investors a powerful tool to keep foreign income and gains offshore, dramatically reducing Irish tax exposure while still enjoying the benefits of EU residency. However, the advantages come with strict compliance requirements, especially after the 2025 budget’s anti‑avoidance measures and the upcoming Non‑Dom Reporting Form.

By:

Maintaining a clear domicile claim,
Segregating Irish and foreign income,
Planning remittances strategically, and
Leveraging double tax treaties,

Irish investors can optimise their overseas property and investment portfolios while staying on the right side of Revenue.

If you own property abroad or hold substantial foreign assets, a tailored review with a specialist tax adviser is essential. The right structure today can save you tens of thousands of euros in Irish tax tomorrow.