Below is the matching framework for investment income (interest, dividends, foreign funds, etc.) under the residence / ordinary residence / domicile rules.
1. Types of investment income
- Irish investment income – e.g. Irish bank interest, Irish dividends, Irish life policies.
- Foreign investment income – e.g. foreign bank interest, foreign dividends, foreign funds, foreign bonds.
2. Resident, ordinarily resident and Irish‑domiciled
Status: Resident + ordinarily resident + Irish‑domiciled
- Taxed on worldwide investment income, Irish and foreign, as it arises.
- Foreign tax suffered may give credit against Irish tax (under treaty / unilateral relief).
- No remittance basis – all foreign investment income is within the charge, whether or not brought into Ireland.
3. Resident but not ordinarily resident (typically first 3 years back)
Status: Resident + not ordinarily resident, with Irish domicile
-
For investment income, in practice still taxed on worldwide income:
- Irish investment income: fully taxable.
- Foreign investment income: taxable in full (subject to foreign tax credit).
- Ordinary residence mainly affects certain non‑resident years and the €3,810 rule below.
4. Non‑resident but ordinarily resident (the “tail” years)
Status: Non‑resident + ordinarily resident
-
You are outside the main charge on foreign investment income unless:
- Foreign investment income exceeds €3,810 in the tax year.
- If total foreign investment income > €3,810, the full amount (not just the excess) is taxable in Ireland (subject to foreign tax credit).
- Irish investment income remains taxable in Ireland.
This can be a key planning window for people who have left Ireland but are still ordinarily resident for up to three years.
5. Non‑resident and not ordinarily resident
Status: Non‑resident + not ordinarily resident
- Taxable only on Irish‑source investment income (e.g. Irish bank interest, Irish dividends, Irish life policies – subject to specific withholding regimes).
- Foreign investment income is outside Irish tax, irrespective of amount, provided it is not Irish‑source.
6. Effect of domicile – remittance basis
If non‑Irish‑domiciled and resident / ordinarily resident:
- Irish investment income: fully taxable.
-
Foreign investment income (interest, dividends, etc.):
- Taxable on the remittance basis – only to the extent brought into Ireland.
- Income kept abroad and not remitted is not taxed (but care is needed with mixed funds, loans, credit cards, etc.).
- The €3,810 limit above is a separate ordinary residence rule; remittance basis is a domicile rule.
7. Irish DIRT, fund exit tax and similar
Regardless of residence:
- Certain Irish investment returns may be subject to withholding / exit taxes (e.g. DIRT on deposit interest, fund exit tax on Irish funds, life assurance exit tax).
-
In some non‑resident situations, you can claim an exemption or reclaim, but generally:
- Resident individuals are fully within the charge.
- Non‑resident individuals may be exempt from DIRT on qualifying non‑resident accounts.
8. Bringing in old foreign savings
-
Capital (savings) built up from income earned when non‑resident and not within Irish tax at the time:
- Can usually be brought into Ireland without Irish tax on the capital itself.
- But investment income generated after you become within the Irish tax net (interest, dividends, gains on funds) will be taxed according to your then status (resident / ordinary resident / domicile).
If you describe your exact status (e.g. “Irish‑domiciled, currently non‑resident but ordinarily resident, foreign interest of €X”), the specific Irish tax outcome can be set out in a short worked summary.
Speak to Professional Tax Advisers
To discover more about Income Tax in Ireland, please call us on +353 (0)1 272 3858 or complete a Free Online Enquiry.