Rental Income Liable Person

Peppa Cig

Good morning

Question on rental income tax liability please.

Owner of property moves to Australia and family member arranges and manages letting of the property including receipt and retention of rental income and associated rental expenditure.

Can the family member receiving the rental income (on behalf of the property owner) submit the rental income tax return as part of their own tax return or must this be completed by property owner?

Thanks

Pawwed Rig

The question is why would you want to as there will be higher rates of tax where it is merged with your own income.

In general we file returns in the landlords name and there are no issues. Technically the collection agent should be filing on behalf of the landlord as they are the responsible party (in the State). I have seen this sone only once or twice though and never including the agents income.

Peppa Cig

https://www.boards.ie/discussion/comment/118093010#Comment_118093010

Agreed. It would be “goofy” arrangement but is it a legitimate method of accounting for rental income?

ari101

Unless the family member is getting to retain the income as their own this should not be done, it's not their income.

As mentioned above a collection agent should be formally appointed/registered who retains the tax and completes a return as an agent for the owner:

"the assessment is [made] in the name of the Irish collection agent" but "the tax to be charged is the amount which would be charged if the non-resident landlord was assessed in her or his own right."

Peppa Cig

https://www.boards.ie/discussion/comment/118093304#Comment_118093304

The family member is retaining the income as their own.

Pawwed Rig

https://www.boards.ie/discussion/comment/118093364#Comment_118093364

Well you are into all sorts of gift tax then aswell. The gift will be the net after income tax.

There are ways around these things though so talk to a tax advisor

ari101

There might be some complex gift element there that the family member might want advice on (beyond the scope of what I would comment on) but if the owner is not going to see the income...