Another Rental Income Tax Question

M

Manuel

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I'm doing my first Form 12 return having rented out my old house for the first time in 2008.

Due to a combination of ignorance and laziness, I continued to receive Mortgage Interest Relief on this property long after it ceased to be my PPR. I eventually rang Revenue to tell them about it. I innocently expected to receive a bill from Revenue for the repayment of this relief but it never came.

Now in my Form 12 I want to use the full interest that I should have been paying as a deduction on my rental income tax. But what's the best way to do this? Should I take the interest I paid in 2008 and just subtract the relief that I already received on it?

(That wasn't as easy to explain as I thought .....)

Thanks.
 
Did you register with the PRTB? If not, that will scupper your plan as you won't be able to claim mortgage interest. If you did register, then your plan (with an explanatory letter) sounds fine.
 
Thanks WaterSprite. Yes, the tenancy is PRTB registered.

Another question please:

We moved into our new house in early 2007. By the time we decided to rent out our old house - and got a tenant - it was 2008.

What is the status (for tax purposes) of the old house for the time perod between us moving out and it being rented? This was practically a year, from early '07 to early '08? I mean, it only became an investment property that started to generate income in Feb '08. What should I do about 2007, if anything?

I couldn't find this explained anywhere on the Revenue website .....

Thanks again.
/M.
 
As you can only have a single PPR, the old house is NPPR from the date you vacate it (or the new house is NPPR until the date the rental started on the old one).
 
Manuel said:


Should I take the interest I paid in 2008 and just subtract the relief that I already received on it?
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That cant be right,! if u do that revenue are only getting back the tax on the relief. Keeping the maths very simple, assume rent was 200 euro, interest is 100 euro and relief is 50 euro, your taxabe income is 200-100 = 100, say tax at 40% = 40 euro for revenue, but they are still down the 50 relief you got, so they would expect 90 euro!
If you do what you propose the calculation is rent minus interest plus relief = 200-100+50 = 150, say tax at 40% = 60 euro!! Revenue lose 30 euro!!
I know the maths are simplistic but thats how I see the concept! Can anyone confirm if this is correct??
I would say you need to pay back the relief in total, but I stress I'm no expert.
 
kev53, you're right of course. If I deduct all the interest when calculating my taxable income, then I have to pay back the relief I got in full (afterwards).

Another quick question, as I can't see it anywhere in the documentation: Can I deduct my 70 Euro PRTB Registration as an expense, in the same way as e.g. Advertising, Letting agency costs etc?

Thanks!
 
Bronte said:
It has not been cleared up in relation to the NPPR fee as far as I know.
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I done a search to see if you can claim for the 200 Euro but unable to find out, I will be ring revenue next week anyway so will ask and let you guys know .
 
You cannot rely on anything you hear over the telephone.

Anyone who is claiming it needs to just write a cover note saying they are claiming it but are not sure if it's allowed. Then it is revenue who will have to answer.
 
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