Foreign Rental Income Losses Fwd & Foreign Tax Paid

F

Frankspeak

Guest
Hello,

I have a foreign rental profit.
I have paid some foreign tax on this.
I also have losses on foreign rental to carry forward.

e.g.
Profit 2010 5,000
Foreign Tax Paid re 2010 2,500
Foreign Losses Forward at end of 2009 10,000

Profit 2011 6,000

How much in losses can I carry forward to 2011?

If I did not have losses forward I would use the taxes paid to eliminate Irish tax arising.
However, can I do this and preserve all of my losses for carry forward, or how does it work?

Thanks in advance.
 
The foreign losses must be used against the income in the next period where you have a profit. So that means you have to use 5k of the 10k up in 2010, and you then have no taxable foreign rental income for the purposes of Irish Income Tax (and so you actually don't require / receive a credit for the foreign tax paid).

So you've got 5k of losses to carry forward to 2011, which will reduce your 2011 taxable profit to 1,000.
 
I don;t understand why you paid foreign tax of 2500 in 2010 when you were carrying forward losses of 10000.Therefore should you not recover the 2500?
 
The losses were racked up in a different foreign country than the one where the profit was, so weren't allowed.

Thanks Mandelbrot for your reply. It is not the one I was hoping for. Can I be cheeky and ask you if you know where this is dealt with on the revenue site or in the legislation please - it is set to cost me in future years.

Thanks again.
 

http://www.revenue.ie/en/personal/buy-sell/foreign-property/foreign-rental-income.html#section2

http://www.revenue.ie/en/personal/b...reign-income-tax-paidliability-irish-tax.html
 
Slightly connected issue

Just completed form 11 - for the first time on the computer.(I hate it)

I 've just declared an overall loss on my two (USA and France) rental properties in 2011
And then I tried to declare the foreign tax I paid which was on the one property in France that made a profit and on which i paid French tax.

But the damn computer would not allow me to enter the tax paid figure .It came up with big red writing saying I'd made an error because ....

"amount entered cannot exceed amount of net profit on foreign rents less amount of losses"

In other words - you can't enter 600 tax when your overall loss was 5.000 euros .

What would a clever tax accountant have done if he didnt want to spend hours on the helpline ? I don't reckon it made any difference as Irish Revenue wouldn't tax me on the overall loss.
 
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If your aggregate net foreign rental income is nil (or negative) then you can't obtain any relief in the current year. It's not relevant to the return so you don't need to do anything.
 
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