Rental incomes and I may have overpaid tax? What can I do?

[Paul O Mahoney]

I asked this a few months ago and RedOnion gave some great advice but cant find the thread.

We have 2 rentals and I include all income less allowed expenses and pay the relevant tax every year.
I got sick in 2007 and thought I instructed our solicitor to transfer ownership to my wife , prognosis was not good then.

The mortgages are in joint names but the rental income is paid by an agent into my wife's savings account monthly. I have assumed that the taxable income was hers and added it to her overall liability which obviously meant it was taxed at 52% .

I had illness income upto my full remission at the end of 2013 and haven't been working for a salary since 2007.

We are jointly assessed and I haven't changed anything, her Salary is substantial and she pays approximately 120k in income taxes annually and its annoying.

As I am still a legal owner of the properties and as RedOnion pointed out I might be losing out on getting some of that income taxed at 20% upto the threshold.

My questions are can I go back and rectify this and while I'm fairly happy to do it myself Would it be more efficient to employ an accountant to do this?

We have never been audited and if one were to come I'm sanguine that I have done our returns honestly and have all the backup for expenses for the properties and for all other non payroll income such as RSUs ,Dividend income, and Rtsos .

Any advice would be greatly appreciated for example how far can I go back?

I should add, all maintenance costs to the properties are paid for by the agent and then deducted from rental income with the net amount transferred to my wifes account.

 

[NoRegretsCoyote]

My questions are can I go back and rectify this and while I'm fairly happy to do it myself Would it be more efficient to employ an accountant to do this?

AFAIK the principle is that you can only reclaim for the preceding four tax years.

 

[Paul O Mahoney]

AFAIK the principle is that you can only reclaim for the preceding four tax years.

Thanks for that, I thought they had a capacity to go back 7 and assumed the tax payer would enjoy the same privilege.

Even so, its better than nothing.

 

[NoRegretsCoyote]

Thanks for that, I thought they had a capacity to go back 7 and assumed the tax payer would enjoy the same privilege.

Your case is almost exactly the same as this one, which was decided by the Tax Appeals Commission. Have a read.

The four year rule seems very strictly applied.

 

[RedOnion]

@Paul O Mahoney
I think this was the earlier thread:

PRB and what to do with it.

I've just received a letter informing me that an old pension I have, and forgot about will be wound up on the 31st of May 2021. Last time I looked at its value a few months ago it was 30k. The PRB will be with Irish Life with a AMC of .5% (50bps). I have no paye taxable income , no social...

www.askaboutmoney.com

 

[Paul O Mahoney]

@Paul O Mahoney
I think this was the earlier thread:

PRB and what to do with it.

I've just received a letter informing me that an old pension I have, and forgot about will be wound up on the 31st of May 2021. Last time I looked at its value a few months ago it was 30k. The PRB will be with Irish Life with a AMC of .5% (50bps). I have no paye taxable income , no social...

www.askaboutmoney.com

Thanks I noticed I was " all over the place" then too, worse now after the passing of mother in law. I think I'll have a stab at it and send it to an accountant now that we got our wills done and get the stuff done properly for once.

Off topic, I eventually worked out those "free shares " that she got in the Mylan merger/ spinoff, they reduced the purchase prices of 2 types of RSUs and that would increase the tax liability when they mature. Over the next couple of years.

Thanks for the advice on that too.

 

[Baby boomer]

Your case is almost exactly the same as this one, which was decided by the Tax Appeals Commission. Have a read.

The four year rule seems very strictly applied.

Useful link, that makes it very clear that the Appeal Commissioners have no power to apply discretion if the Revenue take a strict line on the 4 year rule.

What isn't clear, though, is whether or not the Revenue itself has discretion to waive the rule in certain circumstances, perhaps undue hardship, honest mistake, unclear guidance from a Revenue official and so on. If they have such discretion, then it would be interesting to see if there are any precedents.

Also, and this is where it gets very legally exotic, it's interesting that the Appeal Commissioner uses the phrase "statute-barred" to refer to the overpayment of tax. This suggests that, in law, a debt exists from the Revenue Commissioners to the taxpayer, but the taxpayer is prevented by statute from enforcing payment of it. It does not necessarily follow that this debt is incapable of being set off against monies owed in the other direction, namely the taxpayers current year liability.

An analogy would be where a bank has a statute barred debt against against a customer. The bank can't enforce the debt, but it can offset any monies it owes the customer against the statute barred debt. The concept is that it not the debt itself that is barred but the legal remedy for enforcing it. The debt continues to exist.

I have no idea whether this is a valid approach but it would make an interesting test case!

 

[NoRegretsCoyote]

My reading is that for a vanilla case like this it would be hard to make a case...it's worth a try though!

 

[Paul O Mahoney]

Your case is almost exactly the same as this one, which was decided by the Tax Appeals Commission. Have a read.

The four year rule seems very strictly applied.

Getting error on link anyhoo 4 years it is. And I'll give it a go myself with backup documents.

I'm not able to claim PAYE allowance only personal allowance, yes ?

 

[Paul O Mahoney]

My reading is that for a vanilla case like this it would be hard to make a case...it's worth a try though!

Invoke Jesuit philosophy " do first and ask for forgiveness later"?

 

[Paul O Mahoney]

Just an observation has the Form 11 gotten bigger or am I imagining things.

And it doesn't seem to be populated with her paye tax deductions for 2020, has anyone encountered this, and if so how can I correct it.

 

[anntionette]

Yes it has! Did my returns yesterday and I had to reclaim all my tax allowances (just tick the boxes) usually this is pre selected for me. i imagine the form has been updated for the many changes over the past year. Mainly the various covid payments.