Confused about tax as a non-resident landlord

[apple1978]

I will be moving to a country in Europe to work. I have to rent out my flat. I know about what my obligations are as a landlord and losing mortgage relief etc
Tax for non-resident landlords seems confusing. I know I have to declare that it is rental income and do a tax return.
I spoke to Revenue today and I am even more confused. If I declare that I am a non-resident which I will have to after a certain period it gets very messy. I read somewhere that it seems I can appoint someone as an agent in Ireland and ask them to fill out the tax form and submit for me as a non-resident landlord. This would mean I dont have to bother the tenant for the 20% they would have to deduct ( I need that for the mortgage). I prefer this route, if I have understood properly it means I can get the full rent paid each month and my appointed agent files the tax return at the end of the year. This way I have the full amount each month to cover a mortgage. If I asked a family member to do this who is an OAP would this mess up their pension? I am so confused, they don't make it easy!!!

 

[Bronte]

It's not complicated, officially the tenant is supposed to deduct the 20% but no way do you want to go down that route.

Rent your house, do your own tax returns. Stop the TRS, pay NPPR when due, pay the PRTB when you have a tenant, keep all your receipts. I recommend you hire an accountant to do the returns if you're not good with figures and to set you on the right road.

Make sure you have someone who can call to the house regularly. Get references and check out the tenants. It is not easy to rent from abroad. Better to pay your OAP to help you in this regard.

 

[T McGibney]

I will be moving to a country in Europe to work. I have to rent out my flat. I know about what my obligations are as a landlord and losing mortgage relief etc
Tax for non-resident landlords seems confusing. I know I have to declare that it is rental income and do a tax return.
I spoke to Revenue today and I am even more confused. If I declare that I am a non-resident which I will have to after a certain period it gets very messy. I read somewhere that it seems I can appoint someone as an agent in Ireland and ask them to fill out the tax form and submit for me as a non-resident landlord. This would mean I dont have to bother the tenant for the 20% they would have to deduct ( I need that for the mortgage). I prefer this route, if I have understood properly it means I can get the full rent paid each month and my appointed agent files the tax return at the end of the year. This way I have the full amount each month to cover a mortgage. If I asked a family member to do this who is an OAP would this mess up their pension? I am so confused, they don't make it easy!!!

Although you say you're confused, you actually have a very good understanding of the issues involved.

As per the previous post, you are correct to be wary of arranging for your tenant to deduct 20% tax and pay this to Revenue. If they deduct the tax but 'forget' to pay it to Revenue, you could be left significantly out of pocket.

If you arrange for an OAP or other family member to act as your 'collection agent' this will not affect their existing tax, benefits or pension affairs in any way as a new special-purpose PPSN is issued for the 'collection agent' as par of the registration process.

On the other hand, you will need to be careful to complete your tax returns properly, file them on time and pay your tax liabilities in full. The 'collection agent' is legally accountable to Revenue for unpaid liabilities or unfiled returns, but in my experience, 'collection agent' arrangements work seamlessly once the tax issues are handled properly.

 

[HMC]

I am glad this topic arose because I am in a similar situation to Apple. I'm abroad already and rented my house out in August. I was very against asking my tenant to deduct 20% of the rent, but not for fear that she would "forget" to pay it on to Revenue.

My main reason was that I did not want her knowing that I live out of the State, so I have used my parents' address in Ireland in all correspondence.
Secondly, I think it is a real imposition on tenants to expect them to deal with Revenue on behalf of a landlord. The tenant should be left in peace!

So, when I come to do my first tax return next year, either I or an accountant will cough up the unpaid 20% instead. The Revenue website says you receive a tax credit for this but I've no idea what that means or how much that is.

 

[T McGibney]

So, when I come to do my first tax return next year, either I or an accountant will cough up the unpaid 20% instead.

Just to be clear, you don't have to pay 'the unpaid' 20% in tax, unless you haven't nominated a 'collection agent'. Instead, you calculate your rental profit/loss, taking into account all allowable deductions etc, include these figures on Form 11 and pay 20% tax on any surplus.

 

[oldnick]

-and, of course, you must adhere to the tax rules of your new country,nearly all of whom in Europe have a tax agreement with Ireland.

Maybe an expert here could advise whether OP may have to pay extra tax on his Irish rental property depending on the tax rate and the system in his new country.
Here in Ireland I declare rent and tax paid on properties abroad -after going thru the tax procedures of the countries where I rent property.
It is quite possible to fulfill one's tax obligations to the country where you rent the property - but then pay more tax in the country you live and work, even allowing for double tax agreements.

 

[T McGibney]

Maybe an expert here could advise whether OP may have to pay extra tax on his Irish rental property depending on the tax rate and the system in his new country.

The OP will presumably have to research that issue in their new country of residence. The Irish tax rules as discussed above apply regardless of where the OP lives abroad.