# Tax implications on refinancemoney USA/Ireland



## flmayo (Sep 27, 2017)

Hello, I am knew to this forum and I apologize in advance if I am posting in the wrong area.
We plan to return to live in Ireland next year (2018) permanently. I moved to the U.S in the 80's and since have become a citizen of both countries. We are planning to refinance a rental property that we own and use the equity (approx $150000) to help buy a house in Ireland. We want to take advantage of the favorable Euro/USD exchange rates that are available at the moment. We are wondering would there be any taxes owed either in the U.S or Ireland when we exchange the money?


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## gairloch (Jun 24, 2011)

There is no FOREX gain if you are a USA resident at the time of xfr for outbound FOREX transactions IRL (specifically USD to XXX).
If you are a IRL resident then you'd need to look at at it for inbound FOREX transactions to IRL (specifically xxx to EUR).

It does not mean you will be taxed, just that you'd need to look into it and see.

Ex: In the UK there is a capital gains tax on gains due to FOREX changes, But they are exempt if under a certain annual allowance (I think it's 10K for the UK). As a resident of the UK I must keep this in mind when making FOREX transactions.


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## flmayo (Sep 27, 2017)

Thank you Gairloch for your response! 
Excluding the FOREX gain, would the money from the refinance be taxed on the U.S or Irish side? I started the refinance process last week and never considered the tax implications when transferring the money to Ireland. The refinance is on hold at the moment.


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## gairloch (Jun 24, 2011)

flmayo said:


> Thank you Gairloch for your response!
> Excluding the FOREX gain, would the money from the refinance be taxed on the U.S or Irish side? I started the refinance process last week and never considered the tax implications when transferring the money to Ireland. The refinance is on hold at the moment.


As a US citizen you owe tax on your world-wide income for life. While you may not actually pay any US taxes they must be tallied every year to see and filed every year needed. Plus the FBAR. This is a burden of all US citizens and green card holders (even if the green card is expired and you've left the USA (or vise versa) - it's still valid for tax purposes [forever] until you file the paperwork to kill the beast).
If not a resident of IRL, then no tax of course. If a resident of IRL, then you'd need to look at their capital gains taxes. I do not know IRL capital gains rules.

I know good ole Boris Johnson had a bit of an issue with this when settling his US capital gains taxes on the sale of his home. The UK did not tax his capital gains on his house sale, but the US wanted to tax it the worst way as it fell under the US and British rules. It just that it wasn't taxed in the UK (where he was resident) but it was subject to tax because Boris was a US Citizen (he just did not know it).


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