Non Resident Landlord Taxation

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JakeWhite123

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Hi All,

Long time lurker, first time poster.

I'm an Irish citizen living in the UK and am considering buying a property in Ireland. The intention would be to rent this out for a number of years before returning to Ireland to live in it permanently.

From reading various threads and online sources, I can see that the income tax rate charged on non-residents in receipt of rental income in Ireland is 20%, assuming that the taxable profit is within the 20% tax band. Is this still the case?

I have also read that as I am a UK tax resident, I would need to declare this income in my UK tax return. However, due to the double taxation agreement between the 2 countries, I would be given a credit that would mean I would not need to pay tax in the UK on this Irish rental income, given I will have paid this already to the Irish Exchequer. Does anyone with experience know this is the case?

Finally, I will look to speak with a solicitor or tax specialist before the purchase, so if anyone has any recommendations on good people that would also be very welcome!
 
JakeWhite123 said:
Hi All,

Long time lurker, first time poster.

I'm an Irish citizen living in the UK and am considering buying a property in Ireland. The intention would be to rent this out for a number of years before returning to Ireland to live in it permanently.

From reading various threads and online sources, I can see that the income tax rate charged on non-residents in receipt of rental income in Ireland is 20%, assuming that the taxable profit is within the 20% tax band. Is this still the case?

I have also read that as I am a UK tax resident, I would need to declare this income in my UK tax return. However, due to the double taxation agreement between the 2 countries, I would be given a credit that would mean I would not need to pay tax in the UK on this Irish rental income, given I will have paid this already to the Irish Exchequer. Does anyone with experience know this is the case?

Finally, I will look to speak with a solicitor or tax specialist before the purchase, so if anyone has any recommendations on good people that would also be very welcome!
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The above is correct. My sister is in the same situation and I submit her tax returns each year. You will need your Irish pps number or obtain a new one.

Technically the tenant is supposed to withhold the 20% and submit it to Revenue but this does not happen in practice.

If you have specific questions feel free to DM me.
 
JakeWhite123 said:
I have also read that as I am a UK tax resident, I would need to declare this income in my UK tax return. However, due to the double taxation agreement between the 2 countries, I would be given a credit that would mean I would not need to pay tax in the UK on this Irish rental income, given I will have paid this already to the Irish Exchequer. Does anyone with experience know this is the case?
Click to expand...
If you're on higher-rate income tax in the UK, you probably will have a tax liability in the UK for the difference between their top rate and the 20% deducted here.
 
JakeWhite123 said:
I can see that the income tax rate charged on non-residents in receipt of rental income in Ireland is 20%, assuming that the taxable profit is within the 20% tax band. Is this still the case?
Click to expand...
To oversimplify, your tax liability is basically 20% of all Irish rental profits.

You may get certain Irish credits and reliefs if your UK income is low relative to your Irish income.

As @T McGibney says you may get a credit in the UK. It's worth taking professional advice on this before embarking on such a project.
 
Bear in mind that you can register as non-dom in the UK, you give up your tax credits (3 or 4k) and any money earned outside the UK is then not taxed unless it enters the UK. Depending on the numbers or what other income you have abroad that might work out.
 
Leo said:
Be aware there are rumblings among opposition politicians who are seeking to remove the right to end a tenancy so that the landlord can use the property themselves.
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Thanks Leo, definitely one to key keep an eye on! I am tempted to hold off until the conclusion of the next election to see which way the political winds are blowing.
 
T McGibney said:
If you're on higher-rate income tax in the UK, you probably will have a tax liability in the UK for the difference between their top rate and the 20% deducted here.
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@T McGibney I was under the impression that because there is a double taxation agreement in place between both countries you wouldnt pay tax twice on the Irish rental income.

In anycase I will seek professional advice on this before proceeding.
 
JakeWhite123 said:
@T McGibney I was under the impression that because there is a double taxation agreement in place between both countries you wouldnt pay tax twice on the Irish rental income.
Click to expand...
Double taxation agreements don't mean that you may not pay tax on both jurisdictions - e.g. 20% in Ireland and the difference between that and a higher rate in another jurisdiction!
 
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Does a UK landlord have to pay PRSI and levies? I have looked at the information on this and it looks complicated. Either the tenant pays the tax or an agent on behalf of the landlord is that right?
 
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