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overandunder

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I have a house rented but due to the tenants destroying it, it was un-let for over a year while I tried to get the money together to repair all the damage caused (no chance of getting it back).
I was paying tax but didn't have the property registered with the PRTB as the tenants were "very good friends of a friend".
For the year that the property was un-let and unoccupied, is the interest on the mortgage that I was paying on it allowable against rental income (or future rental for this case)?
 
When you say "I was paying tax" - do you mean that you were paying tax during the time when it was let out.
You should make a tax return (i.e. fill in the forms) for the period that the house was empty, but you should not be liable to pay any taxes for this period as you had no rental income.
From my understanding of the system, the interest paid during a particular period can only be written off against rental income for the same period. You cannot carry that loss forward.
 
I'd love to see a good accountant here asnwer your question with 100% certainty because there'sd a couple of dodgy things here:-

1. Whilst Revenue state that interest can only be deducted during the rental period, they then continue their advice with "but allowable expences can be claimed between rentals". Not too clear . I assume that the word "but" means that , yes, it is reasonable to claim any or all expences during the inbetween period.

2. But your "inbetween" period is very long - a whole year .. I'd still go ahead and put interest down as an expence. And all refurbishing costs of course (not capital expenses( a new wall etc), and make sure that you seperate decorating costs from furniture and similar depreciating stuff.

3. Now, this means that these allowable expences were made against no income . So I reckon you can carry forward those losses -though I do wonder about that whole year gap between lettings.

4. Having said all that , you were naughty and silly not to declare to PRTB and therefore everything I've said above may be a whole load of rubbish because you have -knowingly - disregarded Revenue's regulations on registering with PRTB.
 
very simple answer is you cannot claim interest relief if the income was generated during a tenancy that is not registered with the PRTB. End of Storey. its also now only 70% of the interest that can be writtin off.

In relation to claims during an unoccupied period this is simply a loss and can be writtin off against other income in line with general tax rules
 
oldnick said:
I'd love to see a good accountant here asnwer your question with 100% certainty because there'sd a couple of dodgy things here:-

1. Whilst Revenue state that interest can only be deducted during the rental period, they then continue their advice with "but allowable expences can be claimed between rentals". Not too clear . I assume that the word "but" means that , yes, it is reasonable to claim any or all expences during the inbetween period.

2. But your "inbetween" period is very long - a whole year .. I'd still go ahead and put interest down as an expence. And all refurbishing costs of course (not capital expenses( a new wall etc), and make sure that you seperate decorating costs from furniture and similar depreciating stuff.

3. Now, this means that these allowable expences were made against no income . So I reckon you can carry forward those losses -though I do wonder about that whole year gap between lettings.

4. Having said all that , you were naughty and silly not to declare to PRTB and therefore everything I've said above may be a whole load of rubbish because you have -knowingly - disregarded Revenue's regulations on registering with PRTB.
Click to expand...

Leaving aside the whole PRTB issue:

[broken link removed]
(para. 3) "Interest incurred in the period between lettings is deductible provided that the landlord does not occupy the premises during the period and that a new lease is granted."
 
mandelbrot said:
Leaving aside the whole PRTB issue:

[broken link removed]
(para. 3) "Interest incurred in the period between lettings is deductible provided that the landlord does not occupy the premises during the period and that a new lease is granted."
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You kinda can't leave aside the whole PRTB issue..

taken from the same link

For the year 2006 onwards interest is not deductible where the person making the claim has not complied with the registration requirements of the Private Residential Tenancies board in relation to any tenancies in the particular premises.5 See Tax Instruction 4.8.10 for details.
Click to expand...
 
mandelbrot said:
PRTB registration can be done late / backdated. ;)
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Ah but what if the tenancy has ended or indeed several have ended and never been registered,you cannot register a tenancy that has finished,though I have heard on the Landlord forum those that claim they can but I have to say that is kinda bonkers.
 
Knuttell said:
Ah but what if the tenancy has ended or indeed several have ended and never been registered,you cannot register a tenancy that has finished,though I have heard on the Landlord forum those that claim they can but I have to say that is kinda bonkers.
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Why not, sure when you register a tenancy, all you're registering is it's commencement - the fact that it may already have ended is irrelevant.
 
Mandelbrot - you appear to be relying literal translation of the PRTB regulations rather than their clear intentions . And,yes, it does seem that there are no specific regulations stating when one can register a tenancy. They probably thought it would ,indeed, be bonkers to register a tenancy once there were no tenants and that it would defeat the purpose of the PRTB.

In any case, regardless of one's interpretation of the regulations, according to a previous AAM thread -backdating a PRTB registration - PRTB do not allow registrations after the tenants have gone.

(p.s. God, this is a sad way to spend N.Y Eve. I should have accepted the swingers party invitation but didnt know what to wear)
 
oldnick said:
Mandelbrot - you appear to be relying literal translation of the PRTB regulations rather than their clear intentions . And,yes, it does seem that there are no specific regulations stating when one can register a tenancy. They probably thought it would ,indeed, be bonkers to register a tenancy once there were no tenants and that it would defeat the purpose of the PRTB.

In any case, regardless of one's interpretation of the regulations, according to a previous AAM thread -backdating a PRTB registration - PRTB do not allow registrations after the tenants have gone.

(p.s. God, this is a sad way to spend N.Y Eve. I should have accepted the swingers party invitation but didnt know what to wear)
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Interesting. I haven't read that thread, but surely this can only become a problem if you try to back-register a tenancy that started more than 4 years ago...? Otherwise, at the point when you register a tenancy then surely the PRTB have to assume that it's an ongoing tenancy..?

And yes, obviously that kind of messing does undermine the whole point of the PRTB, but the consequence of not getting your interest deduction are quite severe so I'd be trying whatever might work if it were me!
 
Mandelbrot . I get your point. But trying to get something which will result in a refusal (and may theoretically result in a fine) may be worse than just claiming on the tax return and hoping Revenue doesnt cross-check with PRTB.

Anyway, if you and I register properly with PRTB then OP should have done so. It's a nice academic argument as to what are the exact rules, but essentially we know that OP broke them.
 
oldnick said:
Mandelbrot . I get your point. But trying to get something which will result in a refusal (and may theoretically result in a fine) may be worse than just claiming on the tax return and hoping Revenue doesnt cross-check with PRTB.
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Oh but Revenue have access to the PRTB record! So what you'd really be hoping isn't that Revenue don't cross-check, but that the cross-check alone doesn't lead to any action...
 
overandunder said:
I have a house rented but due to the tenants destroying it, it was un-let for over a year while I tried to get the money together to repair all the damage caused (no chance of getting it back).
I was paying tax but didn't have the property registered with the PRTB as the tenants were "very good friends of a friend".
For the year that the property was un-let and unoccupied, is the interest on the mortgage that I was paying on it allowable against rental income (or future rental for this case)?
Click to expand...

As you were not registered with the PRTB, you cannot claim the interest. Therefore, it is unlikely that you have a loss to carry forward, except for capital allowances.

No PRTB Registration = No Interest Relief. Simple as that.
 
Just to be a pedantic pain-in-the-neck- it is not PRTB registration per se that is required in order to get interest relief, but adherence to the registration requirements of PRTB, which in some cases means a landlord need not register but can still legally claim interest relief.
 
Swyper said:
As you were not registered with the PRTB, you cannot claim the interest. Therefore, it is unlikely that you have a loss to carry forward, except for capital allowances.

No PRTB Registration = No Interest Relief. Simple as that.
Click to expand...

Not necessarily.

The guidance, already linked above, states that interest is allowed as a deduction, for periods in between lettings. (Whether or not these lettings are PRTB registered is irrelevant in this context).

The legislation states that no interest deduction will be allowed in any year, where the registration requirements of the PRTB haven't been complied with for all tenancies.

So, if the house was unoccupied for an entire tax year (so there was no tenancy during the tax year), then the requirements of the PRTB are complied with in that year, as there was nothing due to be registered.

In that case, an interest deduction for that year is allowed, even though the house might be let the previous year, and the following year, without PRTB registrations, and therefore without interest deductibility...
 
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