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Income Tax Question

  • 28-09-2017 2:25pm
    #1
    scribbles2013
    Registered Users, Registered Users 2 Posts: 17 ✭


    I need to submit my income tax returns for rental income and I was wondering if the property wasn't rented for the full year, I assume I have to pro-rata my deductions as well for the length of time it has been rented. I can't deduct the full year of management fees for example?

    Also, I was expecting to pay the 2017 bill next year, forgot about the preliminary tax part. This relates to all IT doesn't it and not just person IT from employment? As in my only income that is subject to IT is the rental income, everything is else is PAYE.

    Any advise would be appreciated :)


Comments

  • #2
    gerrybbadd
    Registered Users, Registered Users 2 Posts: 10,301 ✭✭✭✭gerrybbadd


    scribbles2013 wrote: »
    I need to submit my income tax returns for rental income and I was wondering if the property wasn't rented for the full year, I assume I have to pro-rata my deductions as well for the length of time it has been rented. I can't deduct the full year of management fees for example?

    Also, I was expecting to pay the 2017 bill next year, forgot about the preliminary tax part. This relates to all IT doesn't it and not just person IT from employment? As in my only income that is subject to IT is the rental income, everything is else is PAYE.

    Any advise would be appreciated :)

    You can only deduct expenses that you have actually incurred in the year while this was a rental property so no, you can't deduct a full years worth of expenses unfortunately. Also, you can't deduct pre letting expenses either.

    You will still need to declare your PAYE income on the Form 11


  • #3
    tanit
    Registered Users, Registered Users 2 Posts: 325 ✭✭tanit


    scribbles2013 wrote: »
    I need to submit my income tax returns for rental income and I was wondering if the property wasn't rented for the full year, I assume I have to pro-rata my deductions as well for the length of time it has been rented. I can't deduct the full year of management fees for example?

    Also, I was expecting to pay the 2017 bill next year, forgot about the preliminary tax part. This relates to all IT doesn't it and not just person IT from employment? As in my only income that is subject to IT is the rental income, everything is else is PAYE.

    Any advise would be appreciated :)

    I can be wrong but I'm pretty sure management and other expenses in between tenancies that are reasonable and needed for the performance of the trade (in this case the rental trader) are allowed and you do not need to pro-rata them so long as you have not occupied the premises for that period. That includes management fees, any electricity needed for views to new potential tenants, ads to get new tenants etc.

    The basis of the law is that they will be allowed in the trade as they are considered indirectly involved in the performance of that trade. That's the reason that accountancy fees are allowed as an expense. It's not strictly related to the trade but it's an overhead needed for the good running of the business (in the case of management fees you need to keep paying them in between tenancies in order to continue "trading")

    If the expenses are bigger than your income you will have a loss that you are entitled to carry forward to offset against future profits (under specific rules but allowable)


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