Is Interest Paid Allowed Against USC ?

E

eirman

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After two hours of searching I cannot find a definitive answer (ideally with a revenue link) to this question ....

USC is payable on Gross rent less expenses ..... Correct ?

Is mortgage interest an allowable expense in the above ?
 
I knew I could sense dèja vu...!
http://www.askaboutmoney.com/showthread.php?t=167255

If you manage to struggle through the link to Section 531 in the thread above you'll see that USC is charged on aggregate income. Section 97 TCA 1997 sets out the computational rules for quantifying rental income, the relevant bit for interest is here [broken link removed]

If you download the ROS offline application, and are able to complete the relevant panels for rental income & expenses including interest, you'll see it calculates it on the net rental income.
 
Thanks for your help mandelbrot
I had already spotted the other thread you linked to and I only created this one because the answer was not clear to my non-legalistic brain.

Is interest paid considered to be a capital allowance?

A good accountant that I know says that interest paid is not deductible for USC purposes .... everything else is.

This equates to a levy of about 7 - 8% on rent (if the total rent roll is over 100k).

I really would appreciate a simple yes or no on this please.
 
No - interest isn't a capital allowance, it is an expense.

Yes - interest is deductible for USC, in the same way as it is for Income Tax.

Tell your accountant friend to enter the figures onto a Form 11 on ROS offline or whatever tax software he uses, and he'll see the USC calculated on the net rental income.

Section 97 of the Tax Acts provides the computational rules for calculating income from rents - it doesn't distinguish interest from other expenses, except that only 75% is allowed (subject to PRTB registration). The USC provisions linked in the other thread would have to explicitly require interest be added back onto rental income, and they don't, therefore rental income liable to USC is the same amount liable to income tax (which is the amount after deductible interest).
 
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