Farm Rental Income problem in Form 11

bemak

Hi all, need a little help if you don't mind.

I inherited the family farm in 2020 which had been leased to a local farmer for over a decade previously. In order to qualify for agricultural relief I had to draw up a formal lease agreement with the farmer leasing the land etc as a 'qualifying lease'. The income from the rental is very low and well below the taxable threshold of €18k a year.

I made a start my tax return for 2021 (Form 11) but I notice that when I add the rental amount from the farm lease to the 'Irish Rental Income' section, it has an impact on the final calculation. The inclusion of the farm has a negative impact on the calculation (more tax due). What's odd is that the income figure for 'Gross Rent Receivable' is the same as the figure for 'Exempt Rental Income from the leasing of farm land, under S. 664' so I don't understand why it's having an impact. Surely both figures should cancel each other out in that instance?

I've put a query into ROS but I was just curious to know if anyone else can shed any light on why this might be occuring?

Thanks!

bemak

It's probably USC. The rental income is tax exempt - not USC exempt. Just answering my own question in case anyone else finds themselves in the same position!

Stratvs

https://www.boards.ie/discussion/comment/119288402#Comment_119288402

Yes, USC is chargeable and also PRSI where relevant. It's only Income Tax that is not payable. So that's likely the reason for the difference.

bemak

thanks for confirming!