Tax on Rental Income

Wexford96

Hello,
I reside outside the stateand have rental income on properties back home. 
I forgot to file taxes in Jan and received a letter from taxman saying I need to do it urgently. 
Im struggling to get an accountant to do it for me in Ireland.Can I submit the tax money myself?
The conditions are exactly the same as last year. The income and the expenses. Can I simply submit the same amount to Revenue as I did last year? 
Thanks

relax carry on

Wexford96 wrote: »

Hello,
I reside outside the stateand have rental income on properties back home. 
I forgot to file taxes in Jan and received a letter from taxman saying I need to do it urgently. 
Im struggling to get an accountant to do it for me in Ireland.Can I submit the tax money myself?
The conditions are exactly the same as last year. The income and the expenses. Can I simply submit the same amount to Revenue as I did last year? 
Thanks

It would be unusual to have the exact same expenses for your rental income from year to year. Your deductible interest figure should be changing and repairs etc should be changing.

The filing date for Income tax returns was the 31st of October. You also supposed to pay any outstanding 2016 tax at this point and your preliminary tax for 2017.

You can of course file a form 11 online yourself and pay online also but you must ensure it is filed correctly. As a non resident landlord have you a collection agent appointed?

Wexford96

Hi and thanks for your reply.
I don't have a collection agent, the income just goes by direct deposit to my account.
31st Oct means Im quite a bit late. Do you reckon Ill be fined?
I'll take a look at the Form 11 online and see if I can manage to complete it myself.

Caranica

If the income goes directly into your account your tenants should be withholding 20% off the rent and forwarding directly to revenue?

relax carry on

Wexford96 wrote: »

Hi and thanks for your reply.
I don't have a collection agent, the income just goes by direct deposit to my account.
31st Oct means Im quite a bit late. Do you reckon Ill be fined?
I'll take a look at the Form 11 online and see if I can manage to complete it myself.

You will have a 10% late filing surcharge applied automatically.

I'd be a bit concerned about you meeting your obligations as a non resident landlord. How have you filed in the past and are you declaring your residence status on your tax returns?

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-45/45-01-04.pdf

Wexford96

Thank you for the attachment, which made interesting reading. 
Yes, I have filed in the past and presumed the accountant I used was going to contact me when its time to file again.
This of course is not his duty, so I wont be presuming again.
I guess the 10% penalty plus any additional charges will be enough to keep me on my toes when it comes to filing next year.
By the way, after i file now, the next time I need to file taxes will be 31st Oct this year? And that will be to pay for income for 2017?

ray2016

Hi
I moved abroad and started renting out my Irish property in late 2017. My rental income is currently my only income. My first self assessment is due in Oct 2018 so I have plenty of time to do it but I'm trying to calculate exactly how much tax I will have to pay when the time comes. I am aware that I need to appoint a rental agent and I am in the process of doing that but for my own budget and planning I need to know: 
- As a non-resident landlord whose only income is from rent do I still get the tax credits that I used to get as a PAYE worker e.g. the 1650 personal tax credit?
- Is the wear and tear allowance of 12.5% still granted or has that been done away with?
- Is there tax relief allowed on refurbishments?
I cannot seem to find up to date and comprehensive info on this. Can anybody tell me where I can find this info?
Thanks

relax carry on

Wexford96 wrote: »

Thank you for the attachment, which made interesting reading. 
Yes, I have filed in the past and presumed the accountant I used was going to contact me when its time to file again.
This of course is not his duty, so I wont be presuming again.
I guess the 10% penalty plus any additional charges will be enough to keep me on my toes when it comes to filing next year.
By the way, after i file now, the next time I need to file taxes will be 31st Oct this year? And that will be to pay for income for 2017?

31st October is the deadline. You can file before this date if you wish. At that point you need to pay any outstanding tax for 2017 and pay your preliminary tax for 2018.

relax carry on

ray2016 wrote: »

Hi
I moved abroad and started renting out my Irish property in late 2017. My rental income is currently my only income. My first self assessment is due in Oct 2018 so I have plenty of time to do it but I'm trying to calculate exactly how much tax I will have to pay when the time comes. I am aware that I need to appoint a rental agent and I am in the process of doing that but for my own budget and planning I need to know: 
- As a non-resident landlord whose only income is from rent do I still get the tax credits that I used to get as a PAYE worker e.g. the 1650 personal tax credit?
- Is the wear and tear allowance of 12.5% still granted or has that been done away with?
- Is there tax relief allowed on refurbishments?
I cannot seem to find up to date and comprehensive info on this. Can anybody tell me where I can find this info?
Thanks

Bit of reading.

https://www.revenue.ie/en/property/rental-income/irish-rental-income/what-expenses-are-allowed.aspx

https://www.revenue.ie/en/jobs-and-pensions/tax-residence/tax-credits-for-non-residents.aspx

https://www.revenue.ie/en/property/rental-income/irish-rental-income/what-expenses-are-not-allowed.aspx

Wexford96

Thanks bro

Bobby1984

ray2016 wrote: »

Hi
I moved abroad and started renting out my Irish property in late 2017. My rental income is currently my only income. My first self assessment is due in Oct 2018 so I have plenty of time to do it but I'm trying to calculate exactly how much tax I will have to pay when the time comes. I am aware that I need to appoint a rental agent and I am in the process of doing that but for my own budget and planning I need to know: 
- As a non-resident landlord whose only income is from rent do I still get the tax credits that I used to get as a PAYE worker e.g. the 1650 personal tax credit?
- You will still be regarded as resident for 2017 and maybe 2018 depending on how much time you spend in the country. You will get the €1,650 personal tax credit but obviously wont get the €1,650 PAYE tax credit which you got as an employee.

- Is the wear and tear allowance of 12.5% still granted or has that been done away with?
- 12.5% W&T is still available.

- Is there tax relief allowed on refurbishments?
I cannot seem to find up to date and comprehensive info on this. Can anybody tell me where I can find this info?
- Repairs can be deducted from rental income but house improvements cannot be (ie if you build on another bed room, this is a cost for CGT)
Thanks

See notes above.

Also you do not have to appoint a paid rental agent. A family member or friend who are resident can collect rent on your behalf and then the tenants will not deduct 20%. If you do not have a resident person collect the rent, then it is up to the tenant to collect and pay 20% of the rents to Revenue.

Wexford96

Now that i'm late in paying my tax for 2016 and face a 10% penalty, is there a deadline for me to pay before the penalty gets higher?
Basically, I'd like to pay this tax bill in July/Aug, not now.  I havn't seen any mention of a second deadline in the reading I have done.

HcksawJimDuggan

Wexford96 wrote: »

Now that i'm late in paying my tax for 2016 and face a 10% penalty, is there a deadline for me to pay before the penalty gets higher?
Basically, I'd like to pay this tax bill in July/Aug, not now.  I havn't seen any mention of a second deadline in the reading I have done.

No, it's a 5% penalty up to 2 months late and 10% after that doesn't go any higher. Interest is charged at a daily rate though so if revenue enforce it (they don't always look for interest) it's building at a rate of .0219% per day.

ray2016

Thanks for the info. Looks like I will be able to use all my normal tax credits :) I wasn't sure if tax credits can be applied to rental income (i.e. unearned income) or if they are only used against employment income. Also looks like I will be able to deduct the 12.5% wear and tear allowance (capital allowance)....I just have to dig out all the receipts which will be the tricky part!! Based on this, I think I will be liable for very little or (if I can find all those receipts) possibly 0 tax because my only income is currently my very modest rental income. Is it possible that I might pay 0 tax on my rental income if it is my only income?

handlemaster

get an accountant. money well spent

ThumbTaxed

Bobby1984 wrote: »

ray2016 wrote: »

Hi
I moved abroad and started renting out my Irish property in late 2017. My rental income is currently my only income. My first self assessment is due in Oct 2018 so I have plenty of time to do it but I'm trying to calculate exactly how much tax I will have to pay when the time comes. I am aware that I need to appoint a rental agent and I am in the process of doing that but for my own budget and planning I need to know: 
- As a non-resident landlord whose only income is from rent do I still get the tax credits that I used to get as a PAYE worker e.g. the 1650 personal tax credit?
- You will still be regarded as resident for 2017 and maybe 2018 depending on how much time you spend in the country. You will get the €1,650 personal tax credit but obviously wont get the €1,650 PAYE tax credit which you got as an employee.

- Is the wear and tear allowance of 12.5% still granted or has that been done away with?
- 12.5% W&T is still available.

- Is there tax relief allowed on refurbishments?
I cannot seem to find up to date and comprehensive info on this. Can anybody tell me where I can find this info?
- Repairs can be deducted from rental income but house improvements cannot be (ie if you build on another bed room, this is a cost for CGT)
Thanks

See notes above.

Also you do not have to appoint a paid rental agent. A family member or friend who are resident can collect rent on your behalf and then the tenants will not deduct 20%. If you do not have a resident person collect the rent, then it is up to the tenant to collect and pay 20% of the rents to Revenue.

Like that happens!