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Foreign Rental Income

  • 03-05-2011 5:12pm
    #1
    MR NINE
    Registered Users, Registered Users 2 Posts: 1,353 ✭✭✭


    Just a quick question, if someone could clarify this for me I'd be very grateful:

    With regards to a foreign rental property, if the mortgage interest paid in a tax year is e5,000, would I be right in thinking that only 75% of this (3,750) is deductible?

    I'm currently studying for exams and the solution for this particular question claims that the full e5,000 is deductible, although I was convinced this isn't the case. The published solutions have been known to be wrong on occassion so I'm unsure whether to trust myself or the solution on this one.

    If someone could clear this up for me you'd be doing me a big favour

    FWIW, it is a French holiday home, no more information is given.


Comments

  • #2
    Sean Bateman
    Banned (with Prison Access) Posts: 858 ✭✭✭Sean Bateman


    Check the dates and which law is applicable at that time.

    But yes, currently you'd disallow 25% of the interest.


  • #3
    MR NINE
    Registered Users, Registered Users 2 Posts: 1,353 ✭✭✭MR NINE


    Sean Bateman wrote: »
    Check the dates and which law is applicable at that time.

    But yes, currently you'd disallow 25% of the interest.

    Its in respect of the 2010 tax year, so 25% is deducted?

    Thanks for the help

    Edit - 25% is disallowed, 75% is deducted


  • #4
    Sean Bateman
    Banned (with Prison Access) Posts: 858 ✭✭✭Sean Bateman


    From Revenue's IT70 Guide to Rental Income:

    How are foreign rents taxed?

    In general, income from foreign property is computed on the full amount of the income arising, irrespective of whether the income has or will be received in the State. In the case of foreign rental income this income is charged under Case III of Schedule D and the same deductions and allowances are available as if the income had been received in the State. Deductions are also normally available in respect of such income for sums in respect of foreign tax paid. This income should be included in an individual's tax return on the Foreign Income panel.

    Best of luck with your exams.


  • #5
    MR NINE
    Registered Users, Registered Users 2 Posts: 1,353 ✭✭✭MR NINE


    Sean Bateman wrote: »
    From Revenue's IT70 Guide to Rental Income:

    How are foreign rents taxed?

    In general, income from foreign property is computed on the full amount of the income arising, irrespective of whether the income has or will be received in the State. In the case of foreign rental income this income is charged under Case III of Schedule D and the same deductions and allowances are available as if the income had been received in the State. Deductions are also normally available in respect of such income for sums in respect of foreign tax paid. This income should be included in an individual's tax return on the Foreign Income panel.

    Best of luck with your exams.

    Thanks man and thanks again for the help

    Mods - Feel free to lock


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