Wear and tear allowances

Fitzyfreddie20

Hi doing backdated income returns. I am a PAYE worker and have rental income of about €9000. This amount does not cover mortgage. I know one can only take 75% of mortgage interest. When did that measure come into place? Was it 2012? Was it 100% at one time? Also pay mgt fees, Prtb. Know now you can claim one-eight wear and tear but how much should one estimate that at for two bed apt? Please help as so stressed about it.

relax carry on

Fitzyfreddie20 wrote: »

Hi doing backdated income returns. I am a PAYE worker and have rental income of about €9000. This amount does not cover mortgage. I know one can only take 75% of mortgage interest. When did that measure come into place? Was it 2012? Was it 100% at one time? Also pay mgt fees, Prtb. Know now you can claim one-eight wear and tear but how much should one estimate that at for two bed apt? Please help as so stressed about it.

The 75% interest restriction is in since April 2009. Your capital allowances should not be estimated. Get some professional help if you are struggling with this.

Bobby1984

Restriction of interest came in from April 2009 onwards. Before this 100% of interest was allowed.

PRTB costs are allowed, NPPR costs are not allowed. Management fees, repairs and other costs associated with maintaining the property can be deducted from rental income. You claim capital allowances on capital items such as fridges, furniture etc. These are not estimated but you should have the actual receipts for the purchases.

Your description is a little vague so I am unsure waht you refer to when you say "Know now you can claim one-eight wear and tear but how much should one estimate that at for two bed apt?"
You cannot claim 1/8 of the cost of the apartment. You may be able to claim 1/8 of the cost of capital items in the apartment when you moved out and get in a tenant.

KlausFlouride

1/8 is the 12.5% rate for W&T on capital spend you will see referred to, basically spreading the upfront expense over 8 years. It's an accounting convention.

Fitzyfreddie20

Thanks everyone. Will need to give them a call and appeal the amounts as I didn't put in anything for wear and tear. How do I calculate it. Does it mean one eight cost of furnishing place. Know that it doesn't mean one eight cost of actual apt. Property was bought by my husband and I in 2008. When he passed away in 2010 I moved in with family. He unfortunately didn't have life assurance. Have rented out but that has to be supplemented by my wage. I thought tax could only be paid on profit. Can't sell as its in negative equity by 100 grand.

relax carry on

Fitzyfreddie20 wrote: »

Thanks everyone. Will need to give them a call and appeal the amounts as I didn't put in anything for wear and tear. How do I calculate it. Does it mean one eight cost of furnishing place. Know that it doesn't mean one eight cost of actual apt. Property was bought by my husband and I in 2008. When he passed away in 2010 I moved in with family. He unfortunately didn't have life assurance. Have rented out but that has to be supplemented by my wage. I thought tax could only be paid on profit. Can't sell as its in negative equity by 100 grand.

I'm sorry for your troubles. In order not to exacerbate them, please get some professional advice on your rental returns to at least get you up to date. You'll probably be able to have a go at future returns then. Meanwhile you may wish to read this.

http://www.revenue.ie/en/tax/it/leaflets/it70.html