Incorrectly Claimed Credit & Leaving Country

[ceisteanna]

So I started renting in August 2010 and began claiming the Rent Tax Credit. I finished the lease in August 2011 and moved back to my family home, but it never crossed my mind to cancel the credit. I just logged onto PAYE Anytime and saw it and have now cancelled it.

Question 1
How much will I owe the Revenue? Am I right in thinking the following:

2011 Credit = €1,600 (5 months at this rate so €667) x 20% = €133
2012 Credit = €1,200 (7 months at this rate so €700) x 20% = €140

So I'll owe the Revenue €273?

How bould is it to not tell them immediately and to wait until I'm in a better position financially? (probably won't do this btw) but is the worst that'll happen is they notice and I'm asked to pay it back at a future date?

Question 2
I am leaving Ireland at the end of September and won't be home for a few years.
I've been told it is possible to claim a rebate for the months I won't be in the country. How do I calculate what I would be owed?


Any help appreciated

 

[mandelbrot]

So I started renting in August 2010 and began claiming the Rent Tax Credit. I finished the lease in August 2011 and moved back to my family home, but it never crossed my mind to cancel the credit. I just logged onto PAYE Anytime and saw it and have now cancelled it.

Question 1
How much will I owe the Revenue? Am I right in thinking the following:

2011 Credit = €1,600 (5 months at this rate so €667) x 20% = €133
2012 Credit = €1,200 (7 months at this rate so €700) x 20% = €140

So I'll owe the Revenue €273?

How bould is it to not tell them immediately and to wait until I'm in a better position financially? (probably won't do this btw) but is the worst that'll happen is they notice and I'm asked to pay it back at a future date?

Question 2
I am leaving Ireland at the end of September and won't be home for a few years.
I've been told it is possible to claim a rebate for the months I won't be in the country. How do I calculate what I would be owed?


Any help appreciated

OK, where to start..!

The 2011 credit, that figure of €1600 relates to rent paid. So if you paid at least €1600 in rent during from January - August 2011, which I'm sure you did, then you are entitled to the maximum credit (€1600 @ 20% = €320).

For 2012, you aren't entitled to the tax credit as you haven't been renting. Assuming you are a standard young and unmarried person, your tax credits in 2012 will be €3540 (€1650 x 2 and rent tax credit of €1200 @ 20%).

However your tax credit for the year should be €3300, since you aren't entitled to the rent tax credit.

Up to the end of September you will have used up €2,655 (€3540 x 9/12) of tax credit.

The tax relief that applies when you leave the country operates so that you get the benefit of your full year's tax credits, in your case the 3/12ths that you haven't yet used. Since the €3300 tax credit to which you are entitled in 2012 is greater than the €2,655 that you will use up to end of September, you will still get a refund (but €240 less than if you continue to claim the rent credit that you're not entitled to).

So the best thing you can do right now is nothing, until you finish up work and are leaving the country. You submit your claim for tax back on a form P50, and at the same time explain that you aren't entitled to the rent tax credit in 2012. They'll then balance things out, and you'll get the correct refund.

 

[ceisteanna]

Ah, that's great news. Thanks for taking the time to explain.