What time of the year must Revenue be paid tax on rental income

S

SCA911

Registered User
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We started renting out our house in January of this year.

As first time and reluctant landlords can anyone advise on the following:

1. Are we required to make a return to revenue in Oct this year (2011)?
2. Are we required to pay the tax on the rental income at this time (Oct 2011)?
3. If the house is in my husbands name only (PAYE worker), is it just his income details are to be included in return or is it both of ours (taxed jointly)?

Any advice greatly appreciated.

S
 
On Q3 - I think you will have to do a joint tax return with the rental income listed under his name only. If you both pay tax at 41% it will make little difference to how much overall tax you pay but if one of you is a lower rate tax payer it could make a difference.
 
If your net rental income (rent rec'd less expenses) is over eur3,174 you will be obliged to register for self-assessment. Under self-assessment your tax return (& tax payment) for 2011 will be due in Oct 2012. However, under self-assessment you are expected to pay preliminary tax in Oct 2011. While the prelim tax will be nil for your 1st year this will be something to consider going forward.
 
We started renting out our house last November - are we due for tax returns this October? And do you suggest we get an accountant to look after the returns or try it ourselves?
 
Leaky1 said:
If your net rental income (rent rec'd less expenses) is over eur3,174 you will be obliged to register for self-assessment. Under self-assessment your tax return (& tax payment) for 2011 will be due in Oct 2012. However, under self-assessment you are expected to pay preliminary tax in Oct 2011. While the prelim tax will be nil for your 1st year this will be something to consider going forward.
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I thought it was currently €10,000 - or am I mixing it up with some other tax scheme?
 
We started renting out our house last November - are we due for tax returns this October?
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The rental returns for Oct, Nov and Dec 2010 should be returned by Oct 31st. January onwards will be due in Oct 2012
And do you suggest we get an accountant to look after the returns or try it ourselves?
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It's not a major job but I would suggest maybe get an accountant for the first year as he will make sure you get all entitlements and could save you money in the long run. I don't know how much they charge but can be claimed as an expense so will only cost you half in real terms.
 
Leaky 1,

You say "However, under self-assessment you are expected to pay preliminary tax in Oct 2011."


When you say "expected", is it mandatory or not?


Also i gather you have a choice to pay prelim 2011 tax at 90% of 2011 income or 100% of 2010 income.

I started renting my house in Sept 2010 so have only 4 months of rental income in 2010.
I will pay the full 2010 liability by 31st Oct 2011.
However, regarding prelim tax for 2011 can i pay 100% of 2010 (ie. can i pay the actual 2010 liability for 2010 even though it only relates to 4 months).
eg. rent €1,000 per month. So 2010 income €4,000
However 2011 income would be €12,000. 90% of this would be €10,800.

Can i choose to pay based on 100% of the 2010 income even though it only relates to 4 months?
 
Keano99 said:
Can i choose to pay based on 100% of the 2010 income even though it only relates to 4 months?
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Yes, as long as you pay 100% of your 2010 liability then you will have paid enough preliminary tax...

However, roll it on 12 months to October 2012, when you will owe the remainder of your 2011 tax (i.e. tax on roughly 8 months rental income, assuming you're lucky enough to have a full year's rental), PLUS 100% of 2011 (or 90% of 2012).

So you would potentially be landing yourself with a really big tax bill in October 2012 if you choose to do it that way - but yes that option is available to you.
 
Keano99 said:
Leaky 1,

You say "However, under self-assessment you are expected to pay preliminary tax in Oct 2011."


When you say "expected", is it mandatory or not?
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Yes it's mandatory, in the same way that driving below the speed limit is mandatory, and you are expected to comply! ;)


Keano99 said:
Also i gather you have a choice to pay prelim 2011 tax at 90% of 2011 income or 100% of 2010 income.

I started renting my house in Sept 2010 so have only 4 months of rental income in 2010.
I will pay the full 2010 liability by 31st Oct 2011.
However, regarding prelim tax for 2011 can i pay 100% of 2010 (ie. can i pay the actual 2010 liability for 2010 even though it only relates to 4 months).
eg. rent €1,000 per month. So 2010 income €4,000
However 2011 income would be €12,000. 90% of this would be €10,800.
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Just to clarify, you are talking about tax, so you should be multiplying the above figures by your marginal rate of tax, either 20% or 41% plus PRSI and USC, so say 30% or 50%...
 
mandelbrot said:
Just to clarify, you are talking about tax, so you should be multiplying the above figures by your marginal rate of tax, either 20% or 41% plus PRSI and USC, so say 30% or 50%...
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Bear in mind that deductions for mortgage interest (75% allowable) and other overheads can also be made.
 
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