Non resident landlord tax obligation

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reddanmm

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Hi all, my brother is living in the UK and has decided to rent his house to a hap recipient. He is renting it to her for €900 .
He knows he has to keep € 180 (20%) of this each month for tax . As a non resident landlord is he entitled to claim tax relief on his mortgage interest as he is renting it to a hap recipient .
His mortgage is €700 a month .
Thanks in advance .
 
The other way around. The TENANT retains 20% of the rent for tax. Just a thought, if he can't produce a tax-clearance cert how does he hope to get HAP approval? Do you or he read the documentation?
 
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Hi mathepac he prefers to pay the 20% himself . He will keep it in a separate account . Why do you think he can’t produce a tax clearance cert?
 
reddanmm said:
Hi mathepac he prefers to pay the 20% himself .
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Tenant retains it. Tell your brother to visit Revenue's website and have a read of it:

"Where rents are paid directly to a person whose usual place of abode is outside the State, the tenant is obliged to deduct income tax at the standard rate from the payment (section 1041 TCA 1997). The tenant then gives the landlord a certificate of the tax deducted on Form R185 (Certificate of Income Tax Deducted)."

https://www.revenue.ie/en/tax-profe...-gains-tax-corporation-tax/part-45/index.aspx

Taxation of non resident landlords (pdf file)

Applying for a Tax Clearance Cert (Non-resident applications):

https://www.revenue.ie/en/starting-...ce-certificate/non-resident-applications.aspx

All explained on that page, with links to relevant forms.
 
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Can he claim on his mortgage interest as he is renting to a hap receipient .,
 
Hi guys quick follow up on this. House is now rented out and hap are deducting the tax and put the rest in to his account.
He now needs a tax clearance cert. He is working in the UK, what form does he need. It’s all new to him so hasn’t a clue so please forgive any stupid questions . Can he now claim 100% of his mortgage interest as was stated in today’s budget .
 
Hi my brother rang revenue and they said he had to register first with the TR1 form once this is done use the TC1 form to get his tax clearance certificate .
But it says on the TR1 form only use the TC1 form if non resident. Help
 
reddanmm said:
Hi my brother rang revenue and they said he had to register first with the TR1 form once this is done use the TC1 form to get his tax clearance certificate .
But it says on the TR1 form only use the TC1 form if non resident. Help
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I don't understand your question. He has to register first with Revenue and then apply for a tax clearance cert. 2 separate processes.
 
P Hi thanks for the reply it says on the TR1 registration form that if you are non resident to use the TC1
 

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From a reading of the forms, my advice is - Go with the TR1 form. Your brother must register for Irish tax. He cannot go directly to ROS/myaccount for this. He cannot get tax clearance until they have a registered number to check it against.

As a UK-resident, he will have an Irish tax liability each year approximating 20% of Irish rental profits. Profits will be rents less expenses (inc. mortgage interest at relevant percentage). His UK liability on the profits from the same property will be likely higher* but he can set off the Irish tax liability against this.

*higher personal tax rates/bands in UK but alleviated, I expect, by full mortgage relief on interest arising.
 
The registration form states to use TC1 if non resident . So does he just fill in TC1.
The registration form is contadicting itself
 
reddanmm said:
The registration form states to use TC1 if non resident . So does he just fill in TC1.
The registration form is contadicting itself
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I give up

Here's what the TR1 says
A non-resident body whose sole aim is to receive a registration number to obtain a grant/tax clearance certificate - use Form TC1 available on the website,
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He's an individual not a body so this doesnt apply to him.
 
Setanta12 said:
From a reading of the forms, my advice is - Go with the TR1 form. Your brother must register for Irish tax. He cannot go directly to ROS/myaccount for this. He cannot get tax clearance until they have a registered number to check it against.
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He can do it on ROS or as the OP says, have an accountant do this for him. Paper Revenue forms these days tend to mean interminable delays.
 
And more importantly, he needs to register for income tax as well as any tax clearance cert issues.
 
mathepac said:
The other way around. The TENANT retains 20% of the rent for tax. Just a thought, if he can't produce a tax-clearance cert how does he hope to get HAP approval? Do you or he read the documentation?
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No way must he let the tenant keep the 20%, that's crazy. Revenue turn a blind eye to this. But for HAP they will deduct the 20% directly, they will issue the OP with an annual statement with how much rent has been paid and how much tax paid and that tax paid will result in a pre payment of tax or a refund. It's actually a handy way of having the tax paid so you don't get a hefty bill later in the year.

The OP has 6 months to produce a tax-clearance cert. I'm sure if there are issues around this as it's his first year that he can explain that to the HAP people who are desparate for landlords.
 
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