Non-Resident Landlord Withholding Tax reforms

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Gushering

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My wife and I are working in the UK for a couple of years but moving back to Ireland shortly. While we have been over in the UK my wife has registered her father as a collection agent with Revenue in respect of rental income on an Irish rental property, though in practice we do the Form 11 returns for him on the collection agent ROS profile we have setup. Recently he received a letter from Revenue telling him that Revenue was introducing a new online system for non-resident landlords and that all payments of rental income (either by the tenant to the landlord, or by the collection agent to the landlord) need to be logged in this system. Furhter detail to be set out in a new tax manual as of yet unpublished but apparently the system kicks in from July 2023.

It undoubtedly helps Revenue monitor non-resident money flows but will create added red tape here for citizens with a one-off property. I know non-resident landlords are not flavour of the month but really we are just ordinary joe soaps who pay our taxes on our rental income. Just wondering if anyone has seen more detail on this. The revenue website is very high level. All I can say is I am glad we are moving back permanently to Ireland shortly to escape this extra bureaucracy soon.

From my perspective, the tenants pay their rent into a ring-fenced account in my wife's name. It does not cover the mortgage on the property so we top up the shortfall every month. So I am unclear what payments we need to be logging here. We never get the rental income really, it goes straight to the mortgage provider, and we pay Revenue our income tax bill from other sources.

I'm also unclear whether we need to record each payment monthly or whether we can do this in bulk. I know Revenue is moving to real-time returns digitally in other tax areas so unsure if this is the expectation under these new reforms. So many questions, but so little clarity really.
 
Gushering said:
It does not cover the mortgage on the property so we top up the shortfall every month. So I am unclear what payments we need to be logging here. We never get the rental income really, it goes straight to the mortgage provider, and we pay Revenue our income tax bill from other sources.
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That's irrelevant. The rental income is still assessable income. Certain expenses are allowable for tax purposes.

Irish rental income

This page gives a general idea on how Irish rental income is taxed
www.revenue.ie www.revenue.ie
 
ClubMan said:
That's irrelevant. The rental income is still assessable income. Certain expenses are allowable for tax purposes.

Irish rental income

This page gives a general idea on how Irish rental income is taxed
www.revenue.ie www.revenue.ie
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I know it is assessable income for Revenue purposes. My concern is about logging the payments on this new platform. Do I need to do this monthly now? Up till now I just totalled the rental income once a year and paid tax off those figures once mortgage interest deductions and expenses are accounted for. Is this more of a real-time reporting regime now?
 
I received a letter from Revenue today informing me of this great new system that relieves the agents and tenants from being "chargeable persons". That means if the tenant or agent does not remit the withheld gross rent and just pockets it, you have an uphill battle because the tax on the gross rent is still presumably due and the landlord is entirely liable for it. Sometimes you have to wonder are the institutions of the state trying to get landlords to exit....

The only upside of this is that my family member agent is not responsible for submitting the Form 11 (which was completely bizarre and something I never understood). Otherwise this just exposes the landlord to an even greater possibility of being diddled out of rent because the tenant/agent isn't actually chargeable, which is something that would have at least made them think twice about not remitting the 20% to Revenue.

Pleaser tell me that I am mistaken and that there is a benefit to me as a non-resident landlord here. I'm not seeing it. Is the tenant/agent for example compelled to remit the 20% on a monthly basis, so I can see that the payments are being made or are they allowed to remit the entire sum on the 31st of December each year, by which time I could be down thousands in lost rent and still liable for the full tax. Please say it isn't so.

Edit: There's a section on the Revenue website about it here; https://www.revenue.ie/en/property/...ident-landlords/changes-from-1-July-2023.aspx

It seems the rental notification (RN) must be made monthly by the tenant/agent. Good for the landlord as he can see if things are going awry but tenants/agents will not be pleased about having to log into ROS every month for this.
 
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Similar thread here?

Non-Resident Landlord Withholding Tax reforms

My wife and I are working in the UK for a couple of years but moving back to Ireland shortly. While we have been over in the UK my wife has registered her father as a collection agent with Revenue in respect of rental income on an Irish rental property, though in practice we do the Form 11...
www.askaboutmoney.com
 
Similar thread here?

Non-Resident Landlord Withholding Tax

I received a letter from Revenue today informing me of this great new system that relieves the agents and tenants from being "chargeable persons". That means if the tenant or agent does not remit the withheld gross rent and just pockets it, you have an uphill battle because the tax on the gross...
www.askaboutmoney.com
 
Yeh looks like the same subject but I believe tax on rental properties is better discussed here, right? Maybe a mod could merge the threads.
 
murphaph1 said:
It seems the rental notification (RN) must be made monthly by the tenant/agent. Good for the landlord as he can see if things are going awry but tenants/agents will not be pleased about having to log into ROS every month for this.
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Sounds like NR landlords will have to check every month to make sure the RN is made by the tenant or agent. Early flag if it's missing.

Witholding tax on rental income for NRL's seems like a convoluted system anyway. Its understandable that revenue want their basic 20% until the tax return is made but why should tenants be obliged to make tax submissions on behalf of a NR landlord? They just rented a place to live. Assuming that any tenant would be up to speed on the intricacies of the rental tax system is bonkers when even many landlords dont understand it.

Maybe make it a legal obligation for the NRL to appoint a professional agent who could make the witholding tax submission as part of their rent collection service, eg solicitor, estate agent or accountant. They have PI insurance, typically are members of a recognised body and can be contacted should things go pear-shaped.
 
ClubMan said:
Similar thread here?

Non-Resident Landlord Withholding Tax reforms

My wife and I are working in the UK for a couple of years but moving back to Ireland shortly. While we have been over in the UK my wife has registered her father as a collection agent with Revenue in respect of rental income on an Irish rental property, though in practice we do the Form 11...
www.askaboutmoney.com
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Thanks, merged them both here.
 
I just don't understand why NRLs need to be treated differently at all. If a NRL decides not to pay tax then Revenue can move on the property. It's the easiest type of tax dodger to bring to book because there's generally an asset or more worth a considerable amount. A NRL who is intent on tax evasion isn't going to even reach out to Revenue in the first place. They will not be in the Revenue system to send these letters to. NRLs like me who are known to Revenue are the ones most likely to be tax compliant, at least as tax compliant as resident landlords.

I would like to know the actual rates of tax evasion by NRLs who are in the Revenue system. This measure will do nothing to combat any possible tax evasion by NRLs that are not known to Revenue, just like the current bizarre regime.
 
murphaph1 said:
I just don't understand why NRLs need to be treated differently at all. If a NRL decides not to pay tax then Revenue can move on the property. It's the easiest type of tax dodger to bring to book because there's generally an asset or more worth a considerable amount. A NRL who is intent on tax evasion isn't going to even reach out to Revenue in the first place. They will not be in the Revenue system to send these letters to. NRLs like me who are known to Revenue are the ones most likely to be tax compliant, at least as tax compliant as resident landlords.

I would like to know the actual rates of tax evasion by NRLs who are in the Revenue system. This measure will do nothing to combat any possible tax evasion by NRLs that are not known to Revenue, just like the current bizarre regime.
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Besides, under the new CGT regime which requires the non-resident vendor of a property to have a Letter of No Audit from Revenue before a solicitor is empowered to pay them the net proceeds, Revenue have every vendor on the hook if they have outstanding tax returns or payments relating to the rental income. So the system neatly polices itself.
 
Hi,

I am a non-resident landlord living abroad for some years, but I haven´t up until now used a collection agent. The tenant transfers the rent into my bank account and I file my Form 11 each year.

Could someone please answer a few questions for me?

If I get my sister who´s resident in Ireland to be my collection agent, then the tenant will need to transfer each month’s rent into my sister´s bank account.

And, then each month my sister will need to transfer 20% of the rent into the new system on ROS and then transfer me the remaining 80% of the rent.

Am I correct to say that my sister would need to have a separate PPS number as my collection agent?

Will a collection agent still need a separate PPS number in the new system that will be launched by the revenue in July?

If I register my sister as my collection agent, could I transfer the 20% of the rent each month from my bank account into ROS using her username?
 
The obligation on tenants to (1) know about; (2) act upon on their landlord's tax residency is ridiculous.

Years ago I had a landlord in Dublin with a holiday home in Spain and sometimes when I called her I could tell from the dial tone that she was outside Ireland. Was she resident or non resident? I hadn't a clue and had no way of finding out with any degree of certainty.

The idea that tenants are supposed to withhold 20% of monthly rent and remit to Revenue via an online portal is just bizarre. There is enough bureaucracy in life already without imposing this upon people.
 
The whole regime dates from a prehistoric era when:
  1. Revenue didn't even have a list of properties in the country, never mind knew who owned them. Now with the LPT they have both;
  2. There was no national register of tenancies, now there is the RTB which supplies data to Revenue;
  3. Spontaneous and automatic exchange of information with foreign tax authorities was much less advanced than it is now.
The fact of the matter is that it's no easier for a non-resident landlord to evade tax than a resident one. The whole regime should have been done away with with Revenue moving to a targeted, risk-based approach to audit.
 
NoRegretsCoyote said:
The whole regime dates from a prehistoric era when:
  1. Revenue didn't even have a list of properties in the country, never mind knew who owned them. Now with the LPT they have both;
  2. There was no national register of tenancies, now there is the RTB which supplies data to Revenue;
  3. Spontaneous and automatic exchange of information with foreign tax authorities was much less advanced than it is now.
The fact of the matter is that it's no easier for a non-resident landlord to evade tax than a resident one. The whole regime should have been done away with with Revenue moving to a targeted, risk-based approach to audit.
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You're absolutely right. It's a bizarre approach that seems rooted in anti landlord hysteria. It's also runs counter to the stated intention to "do something" for landlords in the upcoming budget.

Some joined up thinking would be nice for a change.
 
I wonder is it even legal to compel NRL landlords who are resident in another member state of the European Union to have a local representative pocketing a share of the rent for simply forwarding money to Revenue and the landlord. It is clearly at least against the spirit of the freedom of movement of people and capital to do this.
 
murphaph1 said:
I wonder is it even legal to compel NRL landlords who are resident in another member state of the European Union to have a local representative pocketing a share of the rent for simply forwarding money to Revenue and the landlord. It is clearly at least against the spirit of the freedom of movement of people and capital to do this.
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Interesting point, I was wondering about that myself. Even if you accept that the Revenue are legitimately entitled to put measures in place to minimise risk of evasion by landlords in other EU states (which is a dubious proposition anyway) there's no way this could be seen as a proportional and necessary response that infringes as lightly as possible on the basic EU right to do business in other member states.
 
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