Rental income liability

frankythefish

I own a property, and my partner is going to lease it out. In terms of income tax, am I liable or is she?

Thanks

thegolfer

frankythefish wrote: »

I own a property, and my partner is going to lease it out. In terms of income tax, am I liable or is she?

Thanks

You own it, your income tax.

gerrybbadd

How? If he's not making the income, and his partner is, it's her income tax to pay.

thegolfer

thegolfer wrote: »

You own it, your income tax.

Who ever receives the rent is liable for the income tax, why on earth would the owner be if he isn't receiving the rent?

ted1

Why would she lease it out and not you?

Is there a mortgage ? If so she couldn't put it off the interest as an expense. Without a rental income how do you propose to pay the mortgage ?
You need to look into how the revenue would view it, possibly tax evasion ?


Your girlfriend will also be liable to pay tax on the benefit. If the rent potentially is 15k a year and you let her have it rent free then she's to pay tax on the 15k.
http://www.revenue.ie/en/gains-gifts-and-inheritance/valuation-date-and-the-value-of-certain-benefits/free-use-of-property-and-interest-free-loans.aspx

barneystinson

Yusuf Cuddly Logging wrote: »

Who ever receives the rent is liable for the income tax, why on earth would the owner be if he isn't receiving the rent?

In order to receive rent she would have to have an interest in the property capable of creating a lease out of...

lawred2

frankythefish wrote: »

I own a property, and my partner is going to lease it out. In terms of income tax, am I liable or is she?

Thanks

That doesn't make any sense.

How can someone who doesn't own the property rent it out?

ted1

lawred2 wrote: »

frankythefish wrote: »

I own a property, and my partner is going to lease it out. In terms of income tax, am I liable or is she?

Thanks

That doesn't make any sense.

How can someone who doesn't own the property rent it out?

I'd view it as them being gifted the use of it and then sub letting, it does sound like an effort for tax evasion

barneystinson

ted1 wrote: »

I'd view it as them being gifted the use of it and then sub letting, it does sound like an effort for tax evasion

More like avoidance but not even very clever tax avoidance. If the property owner has a mortgage to pay, he'll have to pay it out of his own after tax income rather than receiving a deduction for it from the gross rent that he would receive as landlord. Assuming the partner is just that and not a spouse, they will be eating through their Group C threshold at a rate of (market rent minus 3k). They'll have only minimal income tax deductions. So within a couple of years they could end up paying both CAT and income tax...