Rental income question

finbarrk

A friend of mine owns a house but he lost his job and moved to England for work. He rented out his house. Does he have to pay tax on the rental income?
It is his only house here.

ramacc

yes he will be liable to tax on the rental income. The only relief is a cgt exemption from any gains from selling the house due to principal private residence relief. There is no such income tax relief.

mano79

Yes he will need to do a tax return and pay any income tax on rental profits. He can use 75% of his mortgage interest as an expense against rental income though so it may not run to much of a bill

finbarrk

Ok, thanks folks. I'll tell him that.

dbran

Hi

As he is a non resident landlord, the tennant may be required to deduct tax at source at the standard rate on the rents paid over to the landlord. They complete form R185 and give a certificate of the tax they have deducted to the landlord.

If the rent is collected by an Irish agent, the landlord is assessable in the name of the Irish agent. The agent should be set up under a new pps number and is obliged to file a tax return on behalf of the landlord.


Kind Regards

dbran

finbarrk

Well I think the reason he brought it to my attention is because he got a bill from the revenue. So they are on top of it. I suppose if he produces his mortgage statments they should be able to work something out.

ramacc

finbarrk wrote: »

Well I think the reason he brought it to my attention is because he got a bill from the revenue. So they are on top of it. I suppose if he produces his mortgage statments they should be able to work something out.

He will not be entitled to a deduction for motgage interest unless he has registered with the private residence tenacies board.

finbarrk

Oh, didn't know that either, thanks.

Clanno

is the USC on rental property?

dbran

Yes, before losses and capital allowances.