Help in taxation for rental income

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norejon

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thanks so much . I will review the link you sent . I will defintely have losses for 2011 .. i have paid prelimerary tax last yr for 2011 so would this then roll over

I know i was "entitled "to the rent for 7 months in 2011 but have never recieved it and will never ... so when i calculate rental income do i just write in the 5months i received ?

Thanks againn
 

mandelbrot

Former user
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thanks so much . I will review the link you sent . I will defintely have losses for 2011 .. i have paid prelimerary tax last yr for 2011 so would this then roll over

I know i was "entitled "to the rent for 7 months in 2011 but have never recieved it and will never ... so when i calculate rental income do i just write in the 5months i received ?

Thanks againn
Read the link ;)

"If by the time the tax return is submitted, it has become apparent that the rent is irrecoverable, then the section 101 claim should be made when submitting the tax return. A suggested approach is to set out the rental income computation as follows:

Rent receivable 100,000
Less irrecoverable amount not received (section 101 claim for relief) (5,000)
Net rental income 95,000
Less expenses… etc

Accompanying the rental computation will be a claim in writing containing sufficient detail to prove to the Revenue Commissioners that either the tenant defaulted and the rental income is irrecoverable, or that a waiver was made to avoid hardship on the part of the tenant.
"
 

norejon

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carrying rent loss forward

thanks so much nearly sorted .. one quick question

how do you calacualte your losses , is it the expenses , interest relief and subtract the rent recieved

rent = 2100
expenses = 3200
interest allowed = 1569



thanks in advance
 

elcato

Moderator
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3,092
Read the fourth or fifth post in the thread for an example of calculations :)

liabilty = 3200 + 1569 = 4769
asset = 2100
Loss = liabilty - asset = 2669 to be carried forward to following year. Add any losses from previous year also
 

norejon

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thanks so much. I have completed the ros online self assessment form and will carry that loss through to next year .
 

Bronte

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There is a bit of confusion here. To claim the 75% mortgage interest relief you must register the tenancy with the PRTB and it costs 90 Euro.
 

elcato

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Hi i had a tenant for 9 months paid no rent but cost me a fortune with solictors , court and PRTB
This first post suggests that the latest poster has indeed registered.
 

JMJR

Registered User
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As you are changing from personal habitation to a tenancy you also have to consider that both the mortgage holder and the insurer may need to be informed and they may want to levy business rates instead of personal rates.
In the case of insurance you may only need buildings cover or it is possible to get a specific landlord policy which covers buildings and certain items like boiler/washing machine etc. Fire alarms may reduce the cost of cover.
The tenant is responsible for their own contents cover.


Hi,
Like many people, we have bought at the wrong time (2007) and we cannot sell our apartment. The only option we have is to rent it and then go rent the three bedroom house we are looking for.

I realise now that there are tax implications in doing this (even though the rent won't cover fully the mortgage) and I'm looking for information of what those tax will be.

I did a bit of reading on the Revenue website but I need help just to make sure I get a rough number of what this is going to cost us (so I can budget for it). I will get an accountant to do that more accurately.

Our mortgage is €1050 a month, Mortgage allowance €130 (which I believe we will loose when we rent our property).

Rent: €900, accounting for 1 month no rent, total for the year €10000

Deductions:

Housecharge 100
Maintenance fee 900
Mortage Interest @2% 5300
Boiler service 79
Mortage protection 670
letting agency 1000

Total = €1951, Income tax @ 41%, USC @ 7% and PRSI @ 4%, I owe €1014 to Revenue.

This is a rough calculation but does it look correct?

Also, what make sense in order to not pay tax? reduce the rent? do more yearly renovation in the apartment?

Thanks in advance.
 

laois1

Frequent Poster
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149
Just to clarify - is the USC/PRSI payable on the rental income profit ? Im a PAYE worker ....my accountant has always said this is payable on any profit ??
 

Booter

Frequent Poster
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207
I need some clarification on the area of "losses forward" mentioned a few times in this thread.

With regard to tax returns on rental income, when making a return for say Year 2, where there was a loss in Year 1, is it mandatory to include the Year 1 loss as a "loss forward" on year 2 return? If I don't do this, can I then call the year 1 loss forward at a future date if I need it? I suppose another way of asking the question is, am I supposed to accumulate my losses as the years go on, and enter these on the annual Form 12?

(Hope that makes some sense!)
 
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Nutso

Frequent Poster
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495
I need some clarification on the area of "losses forward" mentioned a few times in this thread.

With regard to tax returns on rental income, when making a return for say Year 2, where there was a loss in Year 1, is it mandatory to include the Year 1 loss as a "loss forward" on year 2 return? If I don't do this, can I then call the year 1 loss forward at a future date if I need it? I suppose another way of asking the question is, am I supposed to accumulate my losses as the years go on, and enter these on the annual Form 12?

(Hope that makes some sense!)
No - the loss must be set off against the first available rental income.
 
J

JKav

Guest
Tax Collection Agent for non resident landlord - Who to ask?

Hi,

I am a non resident landlord and i need to ask somebody to be a tax collection agent for me. I would like to know what their responsibilities as an agent are and if they are personally liable for any tax I would owe?

many thanks for any help with this query,

Jkav
 

Booter

Frequent Poster
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207
Thanks Nutso,

So lets say I've made a loss after deducting relevant expenses etc, but before
(1)Capital Allowances or
(2)Losses forward from previous year

Does that mean that I can hold back (1) for a future year, but that (2) is effectively gone?
 
C

Ciall

Guest
Afternoon all,

I am a PAYE worker making my first ever tax return and I would really appreciate any help that is on offer here.

I am letting my apartment and have been since July 2011. I am currently making my tax return for 2011.

Here are the questions I have
1. I am making my tax return for 2011, but I only left the apartment for 6 months of the year. Will I include 75% of the Mortgage Interest I paid for 6 of the 12 months or the entire amount I paid in the year?
2. I pay a one off management charge once a year. Will I include the entire amount in my deductions or 50% of it (6 of 12 months?)
3. Wear and Tear. I bought the apartment in 2007 and we bought all the existing furnishings at the time separate to the apartment purchase contract. I left all these furnishings in the apartment when I left. Am I entitled to include 12.5% per year of the cost of this furniture as a deduction or am I only entitled to include furniture I bought since the letting?
4. Will I attach receipts or a P&L for my deductions to the Form 12 or will I wait for the revenue to ask for these after they assess my return?
5. I pay into my pension in work but my employers do contribute also. I am pretty sure they take off all sorts of deductions from this already. Do I have to include this and how much do I include (e.g. just what my employers contribute?).
6. I pay life insurance as a requirement of my mortgage. Is this deductable?

Thanking you in advance.
 

norejon

Frequent Poster
Messages
36
well you just claim for the 6 months > Rental income was for 6 months only so the outgoings are against that period of time

You do not attach receipts but keep in case of an audit
Are you registered with www. ros.ie . You can then file the return online


Read this thread from the start . very helpful info on it. Also check out the revenue leaflet on rental income
 
C

Ciall

Guest
Thanks norejon! I am on ROS but I find the whole thing quite confusing. I'm not sure where to put the rental income in. I see a space for schedule E income but I thought rent was schedule D part V?
 

Nutso

Frequent Poster
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495
Thanks Nutso,

So lets say I've made a loss after deducting relevant expenses etc, but before
(1)Capital Allowances or
(2)Losses forward from previous year

Does that mean that I can hold back (1) for a future year, but that (2) is effectively gone?
My understanding is that if you made a loss for a second year, the loss for both years can be carried forward but must be set off against your first rental gain (or if you have another rental property gain can be set off against that).
 

Nutso

Frequent Poster
Messages
495
3. Wear and Tear. I bought the apartment in 2007 and we bought all the existing furnishings at the time separate to the apartment purchase contract. I left all these furnishings in the apartment when I left. Am I entitled to include 12.5% per year of the cost of this furniture as a deduction or am I only entitled to include furniture I bought since the letting?
You can deduct a % of these as a capital cost - e.g. if you used the furniture for 2 years, then you should reduce the cost by 12.5% for 2 years and use this amount to calculate your capital expense. My tax accountant told me that the balance could then be deducted over the following 6 years (rather than 8).
 

superfan

Frequent Poster
Messages
67
You can deduct a % of these as a capital cost - e.g. if you used the furniture for 2 years, then you should reduce the cost by 12.5% for 2 years and use this amount to calculate your capital expense. My tax accountant told me that the balance could then be deducted over the following 6 years (rather than 8).
I am in a similar position except that I lived in my house for 3 years before renting it out.
Unfortunately though I don't have any of the receipts for furnishings from when I bought the house in 2007,can I still claim for this for the period 2011-15?
 
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