First time Form 11

[StephenJ]

My wife (a PAYE earner) has rental income for the first time in 2022 and I expect the net amount of this (rent-expenses) to be around €6k all going well. She normally fills in her tax credits / small ad-hoc income via an income tax return on Revenue's myAccount service.

Am I correct to say that she needs to:

1. Not complete the Income tax return on MyAccount for 2022 if her rental income > 5k as she's then a chargeable person
2. File a form 11 for 2022, but this isn't due for submission until Oct/Nov 2023.
3. In this 2022 form 11 she will be liable to preliminary tax but has the option to pay 100% of the prior year liability i.e. €0

This doesn't feel quite right as the payments to revenue (per calendar year) would look as follows:

• 2022: No tax paid
• Oct 2023: Tax on 2022 rent, no preliminary tax
• Oct 2024: Tax on 2023 rent AND preliminary tax (i.e. 2x tax)

 

[AAAContributor]

2022: No tax paid

Yes. This is just a cash flow feature. A liability still arises for the 2022 year of assessment.

Oct 2023: Tax on 2022 rent, no preliminary tax

In Oct 2023 the tax for 2022 will be due and preliminary tax for the 2023 year of assessment.

Review the preliminary tax in the example here:

Tax Tips for First Time Landlords

In recent years there has been a significant increase in the number of people who have decided to rent out their home and become a first time landlord. Negative equity has left many in the position where they cannot afford to sell their home, yet due to changing life circumstances, their home is...

www.fenero.ie

 

[StephenJ]

Yes. This is just a cash flow feature. A liability still arises for the 2022 year of assessment.



In Oct 2023 the tax for 2022 will be due and preliminary tax for the 2023 year of assessment.

Review the preliminary tax in the example here:

Tax Tips for First Time Landlords

In recent years there has been a significant increase in the number of people who have decided to rent out their home and become a first time landlord. Negative equity has left many in the position where they cannot afford to sell their home, yet due to changing life circumstances, their home is...

www.fenero.ie

Thanks! So the following is accurate then:

• 2022: No tax paid
• Oct 2023: Tax on 2022 rent + preliminary tax for 2023
• Oct 2024: Tax on 2023 rent (less preliminary tax paid in prior year) + preliminary tax 2024 etc.

If this is true then it seems like a bad idea to file your form 11 early (say in Jan) as you'd be paying preliminary tax for the full year in advance? Or can you file in January and request the tax be collected in October?

 

[AAAContributor]

You can select "File Return Only" on ROS:

https://www.revenue.ie/en/online-services/support/documents/ros-help/submitting-form-11-online.pdf

and make any payments separately later:

https://www.revenue.ie/en/tax-professionals/tdm/collection/on-line-payments/on-line-payments-of-tax.pdf

 

[StephenJ]

You can select "File Return Only" on ROS:

https://www.revenue.ie/en/online-services/support/documents/ros-help/submitting-form-11-online.pdf

and make any payments separately later:

https://www.revenue.ie/en/tax-professionals/tdm/collection/on-line-payments/on-line-payments-of-tax.pdf

Thanks for your help.

 

[T McGibney]

Thanks! So the following is accurate then:

• 2022: No tax paid
• Oct 2023: Tax on 2022 rent + preliminary tax for 2023
• Oct 2024: Tax on 2023 rent (less preliminary tax paid in prior year) + preliminary tax 2024 etc.

If this is true then it seems like a bad idea to file your form 11 early (say in Jan) as you'd be paying preliminary tax for the full year in advance? Or can you file in January and request the tax be collected in October?

No. If you file a 2022 return early in 2023, your due date for payment of 2023 preliminary tax remains 31 October 2023 or whatever date in November they specify for online Pay & File.