First time tax return for new landlord - questions

[dmos87]

Folks,

About to submit tax return as first time landlords, however I have some questions and unfortunately the lady in Revenue was not in good form when I rang!

Q1: My tenant moved in on July 1st this year and rental income is 900 per month. For this first return, do I need to pre-calculate the rental income up until December 31st this year or just until October 30th? my reason for asking is that one sum brings me to €3,600 and the other to €5,400. Here's my reason for asking:

"If your net rental income is less than €5,000, use myAccount to declare it through your Form 12. If your net rental income is over €5,000 you will have to register for self assessment."


Q2: Three days before the tenant moved in, I purchased two new mattresses for the premises. Can these be deducted? I've been told only expenses since the tenant moved in can be.

Q3: In the last three weeks, flooring was changed and replaced in the premises at an expense of 1200 (ex VAT). I'm fairly certain that this coupled with other deductions will cause my bill to be in the minus - what happen then?

I appreciate any and all help.

 

[cremeegg]

If your first letting was in 2017, you need to file accounts this time next year. It is the 2016 tax return that is due now.

Q1: My tenant moved in on July 1st this year and rental income is 900 per month. For this first return, do I need to pre-calculate the rental income up until December 31st this year or just until October 30th? my reason for asking is that one sum brings me to €3,600 and the other to €5,400. Here's my reason for asking:

"If your net rental income is less than €5,000, use myAccount to declare it through your Form 12. If your net rental income is over €5,000 you will have to register for self assessment."

I dont understand the question, your net rental income is the rent after expenses.

Q2: Three days before the tenant moved in, I purchased two new mattresses for the premises. Can these be deducted? I've been told only expenses since the tenant moved in can be.

Only expenses after the tenancy commences.

Q3: In the last three weeks, flooring was changed and replaced in the premises at an expense of 1200 (ex VAT). I'm fairly certain that this coupled with other deductions will cause my bill to be in the minus - what happen then?

If this an expense, you may have a loss. It may be capital expenditure in which case you can get a wear and tear allowance of 12.5% of the cost, time apportioned. Which it is can be a difficult question, if this was a repair it is an expense, if it is an upgrade its capital expenditure.

 

[dmos87]

Cremeegg, I could kiss you!! That first line solves it all for me. I'll line up an accountant for next year

 

[Advicepls]

Is this the first time the property has been rented - since July this year? My understanding was that you do the tax return next year to cover 2017. I could be completely wrong but that was my take on it.

 

[Andarma]

I would include the mattresses in the capital allowance and depreciate them by 12.5% per year for 8 years.

 

[Andarma]

Oh, and I would use form 12 for the return next year, as your rental income minus allowable expenses (eg 80% of mortgage interest, insurance, capital allowances etc) will be below €5000.