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Tax on rental income

  • 15-10-2012 8:56pm
    #1
    el10
    Registered Users, Registered Users 2 Posts: 19 ✭


    Just a few questions on renting and tax:

    Am considering buying and renting out a room or two, and am aware that you can get tax relief on the rent a room if less than 10,000, just wondering:

    -What would be the rate of tax if you exceeded the 10,000 rent a room scheme (am aware that you wouldn't be entitled to tax relief on it)
    -Can you stll be classed as owner occupier if you live in the house and rent out rooms that exceed 10,000 rental income?
    -What would happen if you didn't declare the income over 10,000?

    Thanks


Comments

  • #2
    Milk & Honey
    Banned (with Prison Access) Posts: 1,950 ✭✭✭Milk & Honey


    el10 wrote: »
    Just a few questions on renting and tax:

    Am considering buying and renting out a room or two, and am aware that you can get tax relief on the rent a room if less than 10,000, just wondering:

    -What would be the rate of tax if you exceeded the 10,000 rent a room scheme (am aware that you wouldn't be entitled to tax relief on it)
    -Can you stll be classed as owner occupier if you live in the house and rent out rooms that exceed 10,000 rental income?
    -What would happen if you didn't declare the income over 10,000?

    Thanks

    The whole lot would be taxed at the highest marginal rate of the taxpayer.
    The owner of the house would still be owner occupier. the amount of income is irrelevant to his status as occupying landlord.
    If it was not declared and was detected the taxpayer would be prosecuted for filing false returns and would have to pay all the tax due plus penalties and interest.


  • #3
    murphaph
    Registered Users, Registered Users 2 Posts: 19,050 ✭✭✭✭murphaph


    el10 wrote: »
    Just a few questions on renting and tax:

    Am considering buying and renting out a room or two, and am aware that you can get tax relief on the rent a room if less than 10,000, just wondering:

    -What would be the rate of tax if you exceeded the 10,000 rent a room scheme (am aware that you wouldn't be entitled to tax relief on it)
    -Can you stll be classed as owner occupier if you live in the house and rent out rooms that exceed 10,000 rental income?
    -What would happen if you didn't declare the income over 10,000?

    Thanks
    If you exceed the rent a room provisions it's as any other income, taxed at your marginal rate (if you are PAYE for example and on top rate, then all your rental income will be top rate). Nobody can tell you what tax you'll pay unless you provide all your sources of income etc. here which is not practical.

    You'd still be owner occupier regardless.

    Not declaring could land you in prison ultimately. Certainly not something I would advise, seriously.


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