Rental Incomes - Tax return

My husband let his house (via a letting agency) from March 2008 to March 2009 (back living there now).

I have an apartment that I have been letting (via a letting agency) since the start of April '09 (since we moved back into my husband's house).

The house is only in his name and the apt in mine and we are both PAYE workers.
We have just recently got married but are still taxed separately.

We wish to a self assessment tax return for both properies but the information on the Revenue website is a bit confusing.

Can somebody tell us the following:

1. When do we need to do a tax return on the rental income earned for the house from March 08 to March 09?
2. When do we need to do a tax return on the rental income for the apt earned since April 09?
2. Which Revenue forms do we complete?
3. How do we calculate the tax due on both properties?

Thank you and apologies if these are basic questions but this is our first experience of this!

Form 11 is the form you need. For year ending dec 2008 you need to complete that form and have it in by end of this month. For 2009 you need to have it in by October 2010. Have a look at the key posts for Property Investments for what to claim and how to fill them in.

Don't you mean Form 12 for PAYE workers?

If you are a PAYE employee but also have other income which does not exceed €50,000 in a year, you can complete a Form 12.

RMur said:

Can somebody tell us the following:

1. When do we need to do a tax return on the rental income earned for the house from March 08 to March 09?
2. When do we need to do a tax return on the rental income for the apt earned since April 09?
2. Which Revenue forms do we complete?
3. How do we calculate the tax due on both properties?

Thank you and apologies if these are basic questions but this is our first experience of this!

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A tax return must be submitted in respect of rental income earned between March and Dec 08 before the end of this month.

Tax returns covering the rental income earned during 2009, do not have to be submitted until 31 October 2010.

In calculating the tax due you first need to calculate what your rental profit or loss was. This is obtained by deducting allowable expenses from the income received. The tax payable on this profit will depend how how much you are earning from your PAYE incomes and what other personal tax credits that you may have.

The most important allowable expense against rental income is mortgage interest. However, this is only allowable provided that you have registered the tenancy with the PRTB.

Another thing that can trip some people up is with TRS. During periods that a property is rented, you are not entitled to claim TRS. So it's just something to watch out for.

FENERO said:

Another thing that can trip some people up is with TRS. During periods that a property is rented, you are not entitled to claim TRS. So it's just something to watch out for.

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Thanks for the replies guys!

We have claimed TRS all along and are back living in the house after it was rented out for 12 months (March 08-March 09). Not sure what to do now.
Does anyone know how we'd deal with this when completing the tax return? Do we simply add interest paid minus TRS received?

Thanks.

I don't think you can claim TRS when it's not your primary residence. There doesn't seem to be anywhere on the Form 12 to declare this though. I think you would have to call the revenue direct and explain, and they will ask for that years TRS payments repayed.

Can anyone confirm that?

Hi Fenero, I asked Revenue about completing a tax return for rental income and they replied "If your income from other sources (not PAYE) exceeds €3175 you will need to be registered for Income Tax and become a chargeable person and you will be obliged to complete an Income Tax return (form 11)"

I have to say I am totally confused.......it seems to depend who you ask...

The Revenue tax briefing re chargeable person does say that even if gross non PAYE income is less than €50k, a form 11 is required if net non-PAYE income is greater than €3,174.

RMur said:

We have claimed TRS all along and are back living in the house after it was rented out for 12 months (March 08-March 09). Not sure what to do now.
Does anyone know how we'd deal with this when completing the tax return? Do we simply add interest paid minus TRS received?

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Don't start messing different areas up with revenue. Firstly sort out the TRS and get it stopped and repay or reach an agreement on this with whatever department in revenue do this.
Deduct the mortgage interest for the March 08 to Dec 08 from your rental profit and loss calculation. The tax year is January to December, not March to March so don't get bogged down in this. Next year you do the rental income calculation for January 09 to March 09. Did you register with the PRTB?

Thanks for the responses guys!

Yes Bronte, we have both properties registered with the PRTB.
We'll contact the Revenue about the TRS and see what arrangement they suggest for repaying it back.

I had a TRS issue recently (I was claiming TRS for 2001 - 2007 on what was my primary residence from 2001 - 2004 when in fact this residence was rented out in full from 2004). I purchased a new house as my primary residence in 2004 and didn't inform the revenue of the change in my primary residence, although was paying tax on the rental income I was receiving. However, I wasn't claiming any relief on my new primary residence, so when I explained to them this error (after getting a letter demanding a decent sized tax repayment), they were extremely helpful and wait for it ... an absolute pleasure to deal with! I dealt with the Revenue TRS section in Limerick. I don't know if this is the national TRS centre or just for mid-west customers. Probably doesn't help with your query but a nice story involving Revenue all the same!