Living Abroad and House at Home

Apologies if this is a repeated thread......

I have moved to work in Canada and after sending in my p45 and p50 last year...I got a letter from the taxman recently querying what the status of my house is? This is required before they process any tax reimbursements for working only five months last year.

I have rented the house out to friends for a sum that only covers half the mortgauge but at least it's kept warm and occupied.
I'm thinking of replying to say that the house is being cared for my family who live nearby and that I will use it during Summer and Winter breaks thus deeming it my principal private residence.

If anyone has experienced a similar situation I would appreciate some advice.
Thanks in advance!

Why not file a tax return showing the rental income.

I thought there would be a few disadvantages in doing so? E.g.
Lose mortgagee interest relief?
Pay tax, but maybe not as I am not making a profit in rent vs mortgauge?
Home would be deemed my non principal private residence thus further payments?
Possibly be subject to capital gains tax if I ever sold the house in future?
The hassle involved!

....

Tommy2014 said:

I thought there would be a few disadvantages in doing so? E.g.
Lose mortgagee interest relief?
Pay tax, but maybe not as I am not making a profit in rent vs mortgauge?
Home would be deemed my non principal private residence thus further payments?
Possibly be subject to capital gains tax if I ever sold the house in future?
The hassle involved!

Click to expand...

What hassle are you referring to? The hassle of paying taxes?
I am not sure if you are looking for advise regarding tax evasion. If so, this forum is probably not the right place to ask the question.

If not, I do apologize.

I believe, but stand to be corrected, that to be classed as your PPR, you must reside in it for at least 6 months of the year.

The main difference between a tenancy and a licence agreement is that with a tenancy, the tenant has exclusive use of the property. With a license agreement, the landlord may come and go as he pleases; he does not have to reside in the property full time.

A licence agreement does not have to be registered with the PRTB. However, you would probably be liable for a small amount of tax - someone more competent than I am, as regards the tax laws could probably enlighten us.

Tommy2014 said:

I got a letter from the taxman recently querying what the status of my house is? This is required before they process any tax reimbursements for working only five months last year.

Click to expand...

This is an interesting tack from revenue.

If you are willing to take good advice, I recommend you avoid constant and future worry and stress by going straight with revenue.

You probably do not owe any income tax on the rent. Have you a mortgage? Re the CGT, is your home currently in NE? Do you want to post up some proper figures on the property. Value, rent, original cost, mortgage etc.

As another poster pointed out, this house is now no longer your PPR, you live abroad and that is where your PPR is.

Thanks for the advice, I agree it's best to be straight up in the long run...

I built the house on our own land in the NW in 2008, the rent is approx half the mortgauge ( a good tracker one thankfully!!), I expect the value of the house to be 250-300k if the market improved a bit.
I suppose I'll have to pay the NPPR chage of E200 too! I'll have to check what affect this has on the rate I have to pay for the property charge, if any...

Tommy2014 said:

Thanks for the advice, I agree it's best to be straight up in the long run...

I built the house on our own land in the NW in 2008, the rent is approx half the mortgauge ( a good tracker one thankfully!!), I expect the value of the house to be 250-300k if the market improved a bit.
I suppose I'll have to pay the NPPR chage of E200 too! I'll have to check what affect this has on the rate I have to pay for the property charge, if any...

Click to expand...

NPPR abolished this year but you will have to pay property tax. You are also misinformed if you think that just because the rent doesn't cover the mortgage you are not liable for income tax. In fact as a non resident landlord, you should have your tenants paying 20% of their rent direct to Revenue.

if your rent is only covering half the mortgage payments that doesn't mean you have no tax liability, as if on a tracker, then most of your repayments (unless on I/O basis) is capital repayment, and hence not allowed as a deduction, also only allowed write off 75% of the interest element of your repayments. Tax relief on your mortgage (TRS) should also be stopped as its noth your PPR.

Tommy2014 said:

I suppose I'll have to pay the NPPR chage of E200 too! I'll have to check what affect this has on the rate I have to pay for the property charge, if any...

Click to expand...

The NPPR has nothing to do with the property tax. You really need to get your act together on all of these. The NPPR penalties are hugh. Revenue are working out how to link the NPPR, the property tax, and the other one (it lasted one year, was it household charge) so you're storing up trouble for yourself.

Can you give us some figures please. Value, mortgage, rent, interest rate, outgoings.

Look up revenue.ie and here on AAM under the key posts on being a landlord. The fact that revenue are already asking you questions means you must sort everything out now. If you give us the figures, you'll get a good idea if you're actually liable for any tax. You can pay NPPR etc online.

Tommy2014;
Listen to Bronte ,
It is very important to come clean with Revenue as soon as possible. Their penalties just compound up.
Revenue are good and getting better at linking things.
That said they are not Ogres !