Live in LL is holidaying for a year abroad - does he have to inform revenue?

worded

Hi,

Sister is living in a house and she rents out two rooms to 3 "licencees" and earns below the threshold of 14K PA .

She wants to travel for a year and leave the 3 people there and keep her room free for her return. A friend will look after any plumbing issues etc that happen. She doesnt want an estate agency looking after the place.

Are there new tax implications or is it as was and she just declares the amount she earns as usual?

Does she have to declare to the revenue she is now outside the country?

Thanks

cronos

worded wrote: »

Hi,

Sister is living in a house and she rents out two rooms to 3 "licencees" and earns below the threshold of 14K PA .

She wants to travel for a year and leave the 3 people there and keep her room free for her return. A friend will look after any plumbing issues etc that happen. She doesnt want an estate agency looking after the place.

Are there new tax implications or is it as was and she just declares the amount she earns as usual?

Does she have to declare to the revenue she is now outside the country?

Thanks

As I understand it if she's no longer living in the house then they are no longer licencees.

For the rent a room scheme I think there is an exception where you're required to move abroad for work, like if your company had an office in Ireland but then suddenly told you you had to move to Germany. Don't think to go on holiday would count for that though.

So she would be legally required to declare it as income and she would be taxed on the income. Given she's on holiday and wouldn't be earning, it would probably mean she would be at the lower rate of tax. However, I wouldn't know that for sure so I'd suggest she reads the revenue website.

The house will still be her PPR, she is essentially on an extended holiday. Get proper advise but I don't see why anything would change, they would remain licensees and I don't see why she would not still be able to avail of the rent a room tax relief as she still lives there, just is currently on holiday.

worded

Thanks,

Nothing changed except she is on a long holiday after 20 years of working and just taking a year away ...

Yes still primary residence on return

and all can be declared as usual ....

There is still a mortgage on the property and travel isnt possible without rental income and looking at options

Stheno

worded wrote: »

Thanks,

Nothing changed except she is on a long holiday after 20 years of working and just taking a year away ...

Yes still primary residence on return

and all can be declared as usual ....

There is still a mortgage on the property and travel isnt possible without rental income and looking at options

A year of being out of the country changes her yax residency status potentially

She needs to speak to a taxation specialist

worded

Ok thanks

air

Regardless of the RAR situation which I feel is fine as it's still her PPR ( as previously stated) advise her to split the year away equally across two calendar years to minimise her income tax liability.

Samuel T. Cogley

I think you have to be gone three tax years before you're no longer 'ordinarily resident'. I'd argue ordinarily resident is enough to avail of tax relief in situ as you still have to pay tax. As others have said speak to an accountant, she will already be declaring the RAR of course as she's meant to, if not whoops.

She may want to consider coming back for a couple of weeks and living at home. I'd want to be damn sure Part IV rights don't raise their little head.

Marcusm

Stheno wrote: »

A year of being out of the country changes her yax residency status potentially

She needs to speak to a taxation specialist

Being out of the country for a year will not change residency status unless the departure is before the end of January.

Stheno

Marcusm wrote: »

Being out of the country for a year will not change residency status unless the departure is before the end of January.

Tax tesidency requires you to be in the state for 183 days or has that changed?

Marcusm

Stheno wrote: »

Tax tesidency requires you to be in the state for 183 days or has that changed?

183 day rule for a single year or 270 day rule across 2 years in aggregate with no less that 30 days in either of the two years! Rules were introduced in 1994 in first codification of Ireland's residency rules for income tax. If a person is Irish resident and goes abroad for only 12 months, it's hard to establish non residency. Split year treatment, even, would require a greater period and would not apply to non employment income in any event.

Mrs OBumble

Samuel T. Cogley wrote: »

She may want to consider coming back for a couple of weeks and living at home. I'd want to be damn sure Part IV rights don't raise their little head.

Indeed. I'd be worried about this aspect too. Especially if one of the licesees needed to move out during the year: who would choose the replacement.

Also, even if the existing ones stay how will utility bills be handled? The others may not be happy with having to start paying a half of the the daily charge.