Mortgage interest relief question

B

bond-007

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My wife took out a remortgage on the house in December. The mortgage and house are in her name only. Is she entitled to TRS at the married rates or as a single person?
 
Im guessing just as a single person but im no expert.. Is there another section on TRS?
I have a query on rent a room. Is this tax counted over the year from jan to dec? Because i just rented out the second room in my house last month. If both rooms stay rented till dec i will have received e7200 in rent from them. I know this is under the tax threshhold so im unsure what to do about it. Do i tell the tell the tax office? They haven't asked me about it even though i did say on the mortgage application i would rent part of the house out. Does it affect trs if i do declare it?
 
OP - if only your wife is on the mortgage, I can't see how she could claim TRS for both of you. As always, contact the TRS people in Revenue for the definitive view, but that's my opinion.

"Married" TRS doesn't exist per se: where two (or indeed more) people hold a mortgage on a property, and assuming all are owner occupiers and contributing equally, then the allowable TRS is the total of each individual's allowance, that is relief on up to €8,000 mortgage / borrowing interest at the standard rate of tax per person, or the total mortgage / borrowing interest, whichever is the lesser.

Kyla: Yes, it's January to December. You'll have to declare the income [form 11, I think], but providing you don't exceed the threshold - €7,620 income - you'll have no liability in respect of it. Do be cautious though: income of €7,621 and you'll be liable for income tax at your marginal rate of tax on all of it, which would be a very expensive proposition. If you're running close to the maximum late in the year, you can avoid incurring the tax liability - not to mention making a nice gesture! - by giving a reduced Christmas rent, or something similar.

It won't affect the TRS.
 
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BOND-007
Looking at the Revenue leaflet on TRS and the TRS application forms
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both refer to status of claimaint rather than whether mortgage is in a single or joint names. However if in doubt contact Revenue at their locall number 1890-46-36-26 and you should get clarification.

KYLA
The Rent-a-room relief works on the tax year Jan-Dec. The limit is €7,620 for the tax year. If you are under that then the income is exempt. If you go over that ALL the income is taxable as normal rents not just the excess over the €7,620. There is a panel on the 2006 tax return form for rent-a-room income to go in in the "exempt income" section so I would expect that it should be declared even though it is exempt.
TRS is not affected adn neither are there any CGT issues. Another issue is it is not a registerable rental under the PRTB. Theres some good information at http://www.citizensinformation.ie/categories/housing/buying-a-home/owning-a-home/rent_a_room_scheme

sorry crossed with Dreamerb's post
 
Ok, but do i really need to fill all this in? Do they really leave the onus on the person to inform them? And what happens if i dont?- If it doesnt affect tax or anything then what's the point of telling them?!
Im not trying to be 'smart', it just seems a bit pointless..
 
Ooops i meant to say- Thanks for all the info above by the way!
 
Kyla said:
Ok, but do i really need to fill all this in? Do they really leave the onus on the person to inform them? And what happens if i dont?- If it doesnt affect tax or anything then what's the point of telling them?!
Im not trying to be 'smart', it just seems a bit pointless..
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It is the individual's responsibility to ensure that their tax affairs are up to date and reported as required to Revenue. Failure to do so can lead to problems.
 
What problems? If the tenants are paying cash in hand, how would revenue know?
 
Kyla said:
What problems? If the tenants are paying cash in hand, how would revenue know?
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The tenant might be claiming the rented accommodation tax credit. There are other ways for the cat to get out of the bag. Revenue also have all the time in the world to catch up with tax evaders as evidenced by recent high profile investigations and judgements. If you are looking for advice on how to evade tax here then please don't. Most people here don't like spongers and rip-off merchants.
 
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