The Sunday Times - Money Questions 16/08/09

Posted by Jill Kerby on August 16 2009 @ 20:46

PH writes from Dublin: I have been self employed in the construction industry for the past three years paying PRSI class S. Due to the downturn in construction I am now without work.  I have been informed by my social welfare office that the only benefit I can apply for is means tested, but I don’t think I would qualify as my wife earns around €600 per week. Nor do I qualify for any FAS training course or any training scheme because I am not in receipt of unemployment benefit. My accountant informs me that there is an allowance which is not means tested for persons who paid PRSI Class S. Is this correct?   What is my best course of action?


Class S PRSI applies to self-employed people including certain company directors, people in business on their own account and people with income from investments and rents.  The only benefits you are entitled to under this category are a State Pension (from age 66), a widow and widower's contributory pension, a guardian’s contributory payment, maternity benefit (if you are a woman), adoptive benefit and a bereavement grant. I have no idea what allowance your accountant is referring to, but you are correct that any social welfare payments that a community welfare officer could sanction would be means tested on a euro for euro basis against your total household income, which of course includes the bulk of your wife’s earnings. Self-employment has many attractions, but not during a severe economic downturn and for many construction workers, they had little choice in becoming sole traders because so many building companies refused to hire full-time, pensionable employees.  Unfortunately, even those who did, were not always compliant in making employer PRSI contributions, pension contributions or even in passing on their employees’ own pension contributions. Your options are quite limited and your main hope (along with a lot of your colleagues) is to find work in your field or find PAYE employment in a PRSI category that provide you with a better safety net than PRSI category S. You can download leaflet SW 106 from the Department of Social and Community Affairs website (www.welfare.ie); it defines the different PRSI categories and accruing benefits. 





MW writes from Dublin:  I refer to your query from SL of Limerick in last Sunday’s edition. The query related to capital gains tax on profit made from selling your home after having let it for a period of years. Could you tell me if the same applies in the UK?  I have a property there that I lived in for over 15 years before moving back to Ireland for family reasons five years ago.  In order to buy a house here I will have to sell the property in the UK and wonder if I will have to pay CGT?


While you will not have to pay Capital Gains Tax on the five years in which your UK property was not your principal private residence - this is because you made a “distinct break” from the UK and were no longer a tax resident - you will be liable for Irish Capital Gains Tax of 25% on that portion of the proceeds that correspond to your five years residency here. Also, you would have been liable for both UK and Irish income tax on any rent you would have earned from the UK property, but the dual taxation agreement in place between the two countries means that you would only pay the tax in one jurisdiction and receive a tax credit from the other. The UK Inland Revenue has produced helpful guidance notes and booklets which defines residency, ordinary residency and domicile – see http://www.hmrc.gov.uk/CNR/ and a Q&A guide about CGT liability for non-residents: http://www.hmrc.gov.uk/cnr/faqs_capgains.htm 

2 comment(s)

  1. Air Jordan on Apr 27 2013 08:29
    Good article! Thanks for sharing!
  2. Wynell Delvich
    Timely blog post ! I was enlightened by the specifics . Does someone know where my business would be able to access a blank WI DoR Schedule 3K-1 document to work with ?
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