Revenue requesting income tax return

N

no_moolah

Registered User
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Hi all

A friend of mine is in a bit of bother and trying to figure out what to do. I figured I would ask for some advice here to try and steer her in the right direction.

She left her job in mid 2012 and hasn't worked in Ireland since. She moved abroad a year later and is still there. While she was in Ireland and unemployed she didn't claim any state benefits so there was nothing on file for her from the revenue's point of view.

She had 2 properties - one she had let for 7 years (approx) and the other she rented out when she quit her job. She didn't declare tax on either properties and used the rental income to live off.

Now she's back here temporarily as the banks have sold one of her properties due to arrears and are trying to take the other one. When she picked up her post recently she saw several letters from the revenue (only one a year sent) requesting income tax returns. No mention of rental income in the letter - it just says there are no tax returns on file. It doesn't appear to be an audit either.

What I want to know is - what do these letters mean? Do the revenue know about the rental income and are looking for the returns or are they just concerned that my friend seems to have fallen off the face of the earth since 2012?

The reason I ask is that she is battling with the banks at the moment and any money she has is going towards dealing with her 35k arrears. They have initiated proceedings for a repossession order. She wants to deal with the revenue but financially she cannot do this until she sorts things out with the bank. She cannot afford to pay an accountant to deal with the returns. Ideally she would like to put this on hold for a few months. How urgent is it that she deals with it now?

She fully intends on resolving any issues with the revenue but she's afraid if she responds now explaining the situation they'll start putting her under pressure to sort it out now.

Any advice welcome !

Thanks, as always :)

NM
 
She had 2 properties - one she had let for 7 years (approx) and the other she rented out when she quit her job. She didn't declare tax on either properties and used the rental income to live off.
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What makes her exempt from filing tax returns on her rental income for 7 years?
 
OP there are numerous ways that revenue come across people like your friend.

Contracts are stamped with her PPS number on them. Tenants claim rent relief. PRTB registration NPPR Household charge ect.

Anyway that being said she needs to summaries up the rental income that she received each year. Then get the expenses associated with the property.

Registration with the PRTB is required to claim the 75% of mortgage interest.

A late registration is available.

Then get the P60s and any medical expenses ect that she may have had.

Has she paid the NPPR for the houses if not the liabilities for that will dwarf any income tax that may be due.
 
Thank you Joe.

My question is whether she can put this on hold for a few months or if she has to urgently deal with it now. As previously explained, her main priority is stopping the bank repossessing her property.
 
She needs to get all her Bank Statements together for the period of rental. She needs to sort out the PRTB situation in order to claim the interest relief. She needs to get all her bills and replacement of furniture etc incurred during the letting period. She needs to get Certificates of Interest from the Bank. I do not know which property has been repossessed but if she still retains the one she had rented for the 7 years she could have a large bill if the NPPR Tax has not been paid. There is a household charge and LPT issue to be sorted during the last 7 years. NPPR and penalties, Household Charge and LPT are not deductible against Rental Income.
There is the possibility that she could have a significant bill from Revenue which would arise from the time she was working and renting. She needs to get all her paperwork in order and do out a spreadsheet herself to make it understandable on a yearly basis. She needs also proof of her income from employment for the period.
I know you have said that she cannot afford an accountant but I would advise that she cannot afford not to employ one. The accountants bill will be tax deductible.
 
no_moolah said:
Thank you Joe.

My question is whether she can put this on hold for a few months or if she has to urgently deal with it now. As previously explained, her main priority is stopping the bank repossessing her property.
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I would see them as separate issues and to deal with them both now. Not easy in the circumstances. The banks will do their thing and revenue likewise. Is it the house that was just let for the last 2 years that the Bank is now trying to repossess.
 
Hi Dermot

Yes the property being let for 2 years is the one the banks are trying to repossess. The other property which was let for 7 years is the one that they repossessed and sold at a loss.

It's a bit of a mess really. Thanks for your advice.
 
In relation to the property that the banks repossessed I would imagine that if the Banks have sold it on they would have had to sort out the amounts owing for NPPR & penalties/Household charge & LPT in order for them to complete the sale. So she probably does not have to concern herself with those issues in relation to that house.
She will still have to register with PRTB in order to get the relief on the Bank Interest on both houses.
In relation to house No 2 the NPPR tax ended on 31/03/13 so the question is was it her main residence up to and including that date. If it was No NPPR due and if not NPPR due plus penalties. There is a one month grace period – so all 2013 charges paid after 30th June 2013 will attract a late payment fee of €20 a month.
LPT came into effect on 1st July 2013.
I am aware of how messy a situation can become when the finances go wrong as I have a good friend who has come a cropper and his situation is now an awful mess.
 
Dermot said:
In relation to the property that the banks repossessed I would imagine that if the Banks have sold it on they would have had to sort out the amounts owing for NPPR & penalties/Household charge & LPT in order for them to complete the sale. So she probably does not have to concern herself with those issues in relation to that house.
She will still have to register with PRTB in order to get the relief on the Bank Interest on both houses.
In relation to house No 2 the NPPR tax ended on 31/03/13 so the question is was it her main residence up to and including that date. If it was No NPPR due and if not NPPR due plus penalties. There is a one month grace period – so all 2013 charges paid after 30th June 2013 will attract a late payment fee of €20 a month.
LPT came into effect on 1st July 2013.
I am aware of how messy a situation can become when the finances go wrong as I have a good friend who has come a cropper and his situation is now an awful mess.
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That's exactly what I was looking for - thank you Dermot. Much appreciated.
 
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