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Tax at 48%?

  • 19-02-2020 11:15pm
    #1
    Wexford96
    Registered Users, Registered Users 2 Posts: 247 ✭✭


    Having lived overseas for a long time I've come home.
    I have property in Ireland which gives a profit of 25k per year.
    I have a job that pays 50k per year.
    My accountant told me that from now on I will be paying 48% tax on my rental income (40% + 4%USC +4% PRSI)
    I think he means that I will pay normal tax on my salary (20% on most and 40% on remainder), then 48% on the rental profit.
    This seems so high! Is there a way to avoid giving 48% of my profit away?
    Thanks for reading.


Comments

  • #2
    bilbot79
    Registered Users, Registered Users 2 Posts: 2,084 ✭✭✭bilbot79


    Wexford96 wrote: »
    Having lived overseas for a long time I've come home.
    I have property in Ireland which gives a profit of 25k per year.
    I have a job that pays 50k per year.
    My accountant told me that from now on I will be paying 48% tax on my rental income (40% + 4%USC +4% PRSI)
    I think he means that I will pay normal tax on my salary (20% on most and 40% on remainder), then 48% on the rental profit.
    This seems so high! Is there a way to avoid giving 48% of my profit away?
    Thanks for reading.

    You need to add USC and prsi to your salary too. Those figures are right


  • #3
    CiarraiAbu2
    Registered Users, Registered Users 2 Posts: 584 ✭✭✭CiarraiAbu2


    Pay into a pension, it's not allowable against the profits of the rental but is allowed against your income tax. You will save 40% of what you put in, depending on your age and higher tax bracket.


  • #4
    Wexford96
    Registered Users, Registered Users 2 Posts: 247 ✭✭Wexford96


    CiarraiAbu2 wrote: »
    Pay into a pension, it's not allowable against the profits of the rental but is allowed against your income tax. You will save 40% of what you put in, depending on your age and higher tax bracket.

    Great, anything to get the taxes down a little. Could you recommend any safe and low-drama pension fund I could start putting money into?
    Thank you.


  • #5
    CiarraiAbu2
    Registered Users, Registered Users 2 Posts: 584 ✭✭✭CiarraiAbu2


    Wexford96 wrote: »
    Great, anything to get the taxes down a little. Could you recommend any safe and low-drama pension fund I could start putting money into?
    Thank you.

    Afraid not but there are plenty of financial advisors around the place to sort you out. Also remember to hold onto any receipts and invoices for expenses carried out in the year to offset against profits.


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