Help in taxation for rental income

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mandelbrot

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thanks Mandelbrot. I'm advising a mate on this as they dont have a clue so just reading up as quick as I can as I know the deadline is tomorrow

2 other questions -
I have their PPS number but cant get them registered online through RAS. Is their some sort of trick to this? What category shoudl I select as none seem to work with their number!
Form IT10 says you should register (TR1) with the local tax office when the rental income starts to come in. I always thought the only registration needed was with the PRTB
Ah I love it, your friend has you flapping around while they remain blissfully ignorant of their own responsibilities! Seen it so many times...!

First things first, is the net rental income (rent receivable minus allowable interest and expenses) greater than €3,174 in 2011?

If no, then your friend doesn't need to register for income tax self-assessment or for ROS, bt just needs to complete a Form 12 for 2011, and he'll get a balancing statement in due course telling how much, if anything, he owes.

If yes, then your friend is possibly goosed, as it could take weeks to get registered for income tax via TR1 and then register for ROS, given that it's now the busiest time of year. But anyway the process would be:

  1. Complete a form TR1 (to notify the tax office that he needs to be registered as a self assessed taxpayer).
  2. Once he has his registration for income tax confirmed, he then can register for ROS to file his return online and pay his tax by DD mandate / Laser.
  3. If he can get 1 & 2 above sorted before 15 November, he can just scrape the extended deadline for filing and paying online.
 

Delboy

Frequent Poster
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Ah I love it, your friend has you flapping around while they remain blissfully ignorant of their own responsibilities! Seen it so many times...!

First things first, is the net rental income (rent receivable minus allowable interest and expenses) greater than €3,174 in 2011?

If no, then your friend doesn't need to register for income tax self-assessment or for ROS, bt just needs to complete a Form 12 for 2011, and he'll get a balancing statement in due course telling how much, if anything, he owes.

If yes, then your friend is possibly goosed, as it could take weeks to get registered for income tax via TR1 and then register for ROS, given that it's now the busiest time of year. But anyway the process would be:

  1. Complete a form TR1 (to notify the tax office that he needs to be registered as a self assessed taxpayer).
  2. Once he has his registration for income tax confirmed, he then can register for ROS to file his return online and pay his tax by DD mandate / Laser.
  3. If he can get 1 & 2 above sorted before 15 November, he can just scrape the extended deadline for filing and paying online.
As I work in finance, I was expected to know all this and thats how I got roped in!
No, rental income was small in 2011...house just rented for a few months (rented for all of 2012)
So 2011 net rental income (rent receivable minus allowable interest and expenses) = 1,600 or so
In 2012 that figure is going to be just under 5k

So just a form 12 is needed for now. Does the form 12 have a deadline of today or can that go in at any stage this year?
And then register in time with ROS for the Oct deadline for next year (tax will then be due for 2012 and preliminary tax for 2013)

Thanks for the help. Much appreciated as I spent hours reading various threads here, and trying to decipher the Revenue forms....but they're not the clearest
 

mandelbrot

Former user
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As I work in finance, I was expected to know all this and thats how I got roped in!
No, rental income was small in 2011...house just rented for a few months (rented for all of 2012)
So 2011 net rental income (rent receivable minus allowable interest and expenses) = 1,600 or so
In 2012 that figure is going to be just under 5k

So just a form 12 is needed for now. Does the form 12 have a deadline of today or can that go in at any stage this year?
And then register in time with ROS for the Oct deadline for next year (tax will then be due for 2012 and preliminary tax for 2013)

Thanks for the help. Much appreciated as I spent hours reading various threads here, and trying to decipher the Revenue forms....but they're not the clearest
A form 12 only gives rise to a P21 balancing statement, I've never seen interest or penalties on one, so I wouldn't be panicking about getting it filed today.
 

bibiphoque

Frequent Poster
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12

Wear & Tear


12.5% over 8 years

Item |Amount €
3 Piece Suite |500
Table/Chairs |600
Washing Machine |400
Fridge | 200
Blinds/Curtains | 800
Heaters | 300
Flooring/Carpets | 1500
Kitchen general | 500
Total | 4800

(1) 600

General

Expense |Amount €
Management Fees |800
Insurance House|400
Insurance Life|500
PRTB | 90
Cleaning | 110
Boiler Service | 100
Total | 2000

(2) 2000

Repairs

Expense |Amount €
Handyman painter|100
Plumber |100
Electrician|400
Gardener|100
Accountant|300
Total | 1000

(3) 1000

Interest (75% of annual interest note: not mortgage repayments)

Total annual 4000 * 75%

(4) 3000

Total deductions 1 + 2 + 3 + 4
(a) 6600

Total rental return 900 * 11
(b) 9900

Amount due for income tax b - a
3300

Expenses not allowed

NPPR of €200
Property Tax (although not clearly stated by revenue).
Initial fit out of furniture costs.
Initial repairs to bring place up to standard.
Initial cleaning.
Labour costs carried out by the Landlord at any time.


The Form12 should be completed and sent to revenue by October 31st of the following year in which you are filing for i.e. it is due in
October 2013 for this year.


*Disclaimer : Figures are made up. Accountants may get paid more or less.
I really created a big thread here! Anyway, I do have a follow up question about your example, or more a clarification. In your example, you say "Amount due for income tax b - a = 3300". Does that mean that this is the amount taxable, i.e. if we use 52% (41% income tax, 7% PRSI and 4% USC) then I owe €1716?
 

elcato

Moderator
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I do have a follow up question about your example, or more a clarification. In your example, you say "Amount due for income tax b - a = 3300". Does that mean that this is the amount taxable, i.e. if we use 52% (41% income tax, 7% PRSI and 4% USC) then I owe €1716?
Yes, that is my take on it and is what I do for my return except I think PRSI is 4% and USC is 7%.
I really created a big thread here!
Agreed. Thread is now closed so that specific questions are seperated out.
 
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