Rental income

kildare09

Registered User
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Hi

A friend of mine submitted Form 11 to revenue in October, she has a rental property which she purchased in 2006. It was not rented out until 2009 onwards and it is currently rented. She has now received a letter from the revenue asking for rental computations since she purchased the property in in 2006. She did not decalre the rental income in 2009 0r 2010.

Am I correct in saying that she only has to pay tax on the rental income in 2011? Another friend of ours says that as long as you submit form 11 and declare your rental income on that form that you are okay? By okay I mean that the revenue can't come after you for 2010 tax on renatl income because she submitted the form to them first as opposed to them chasing her for a tax return on the rental income?

Could someone please answer her question as she is very worried that she will be hit by a revenue bill and interest and penalties.

Thanks for your help
 
Am I correct in saying that she only has to pay tax on the rental income in 2011? Another friend of ours says that as long as you submit form 11 and declare your rental income on that form that you are okay? By okay I mean that the revenue can't come after you for 2010 tax on renatl income because she submitted the form to them first as opposed to them chasing her for a tax return on the rental income?

Its self assessment your declare the income on your return and pay the tax. If she has not filed a return in the years that she had income she may have a liability.

She has not registered the tenants with the PRTB and so mortgage interest is not allowable. Depending on how much her other income is she may end up owing 41% tax PRSI Income Levy / UCS. She needs to get the tenants from 09 & 10 registered with the PTRB get her P60s mortgage interest and rental expenses together and hope that the revenue will allow the late registration to stand and allow 75% of the mortgage interest.
 
Hi

A friend of mine submitted Form 11 to revenue in October, she has a rental property which she purchased in 2006. It was not rented out until 2009 onwards and it is currently rented. She has now received a letter from the revenue asking for rental computations since she purchased the property in in 2006. She did not decalre the rental income in 2009 0r 2010.

Am I correct in saying that she only has to pay tax on the rental income in 2011? Another friend of ours says that as long as you submit form 11 and declare your rental income on that form that you are okay? By okay I mean that the revenue can't come after you for 2010 tax on renatl income because she submitted the form to them first as opposed to them chasing her for a tax return on the rental income?

Could someone please answer her question as she is very worried that she will be hit by a revenue bill and interest and penalties.

Thanks for your help

Unfortunately the revenue can go back as far as they like, in pursuit of unpaid taxes. Depending on the answers that they receive in relation to rental income computation, they may open the book on your friend, and calculate interest and penalties on unpaid taxes. Best thing to do I think is to get your friend to work out the rental income for 2009 and 2010, the mortgage interest, and any costs associated with renting out the property, not forgetting that you can write down fixed assets over six years as well e.g. you can depreciate a washing machine, a sofa etc. Get it all together and then send it on. If your friend comes clean, the penalties will be less severe, than if they investigate first and discover undeclared rental income. Best of luck
 
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