Spouse to declare rental income

[outofmymind]

‘’Through joint assessment rental income may be allocated between spouses on the form 11 in a way which is most beneficial to the taxpayer.Therefore is not required to be split evenly’’

That is so crazy - I wonder if there is anything I can do? It sounds a bit weak to go back to Revenue and say 'someone on the internet was told they could split it' but maybe that is my only option.

 

[outofmymind]

If that was the case wouldn't example 2 here be different?

In that case the spouse did not seem to have any ownership of the property, whereas for both @Millie* and myself, our spouses do have joint ownership. It would make sense that this would make a difference.

 

[ClubMan]

That is so crazy - I wonder if there is anything I can do? It sounds a bit weak to go back to Revenue and say 'someone on the internet was told they could split it' but maybe that is my only option.

One way or another, if a taxpayer makes a mistake with their taxes on foot of information provided by Revenue, Revenue will not accept that as a valid defence/excuse. If in doubt it's necessary to get independent advice from a relevant tax professional.

 

[Cameo]

Just an update on this, although I am still not 100 percent on which way to go, we’re going for joint assessment this year

 

[Nordkapp]

For 2025 the return has all rental income assigned to my wife as a lower 20% tax payer. 11 weeks awaiting a balancing statement to see if revenue agrees with what Millie has indicated in a previous post.
I will provide an update once they conclude that assessment

 

[Cameo]

For 2025 the return has all rental income assigned to my wife as a lower 20% tax payer.

Thanks and are you going for joint assessment?

 

[Nordkapp]

Thanks and are you going for joint assessment?

Yes

 

[JoeRoberts]

Are both names on the lease or just your wife ?

 

[Cameo]

Are both names on the lease or just your wife ?

I need to check, have a feeling it’s just me

 

[torblednam]

For 2025 the return has all rental income assigned to my wife as a lower 20% tax payer. 11 weeks awaiting a balancing statement to see if revenue agrees with what Millie has indicated in a previous post.
I will provide an update once they conclude that assessment

The fact that the balancing statement comes back in accordance with your return means nothing - you're assuming an analysis / decision by Revenue that doesn't exist.

Income follows beneficial ownership; if the property is jointly owned, the income is split accordingly.

 

[Nordkapp]

Income follows beneficial ownership; if the property is jointly owned, the income is split accordingly.

I thought joint assessment allowed for allocation of income where one party is a lower earner, same as assigning unused tax credits

 

[ClubMan]

Maybe this thread is relevant here?

Renting out property by a wife while it is owned by husband. Rental income in Form 11.

Hi all. A husband and a wife are jointly assessed in Form 11. Husband earns gross €60,000, PAYE. Wife doesn't work. Husband also owns a house for renting out. Wife is a landlord of that house (kind of appointed by husband), tenancy registered with PRTB and wife is registered as landlord there...

www.askaboutmoney.com

 

[torblednam]

Maybe this thread is relevant here?

It's relevant, insofar as completely incorrect information/ assertions have gone unchallenged.

 

[JoeRoberts]

assigning unused tax credits

That is not the same as allocating income. Income can't be allocated. Whoever earns it is liable for the relevant tax. As a minimum I would imagine the wife would need to be the sole name on the lease.

If we look at what Revenue say about the landlords tax credit: it talks about entitlement to rent.

"If you own a share in a rented residential premises you are eligible to claim the relief. In these circumstances the relief will be apportioned based on the percentage of rent that you are entitled to."

 

[torblednam]

There's a lot of wishful thinking abroad in this thread, and matters have not been helped by someone getting a bum steer from a very junior member of Revenue staff (that's who deal with MyEnquiries queries).

Section 52 of the Taxes Consolidation Act 1997, coupled with well established principles of equity law, are at play here:

1. Section 52 TCA 1997 (Persons Chargeable)

Section 52 states that income tax under Schedule D (which encompasses Case V rental income) "shall be charged on and paid by the persons or bodies of persons receiving or entitled to the income".

In Irish law, "entitled to" is interpreted as beneficial entitlement. If a married couple owns a property as jointly, property law dictates they hold an undivided, equal share in the asset. Because they have an equal beneficial interest in the property, they are equally entitled to the income it generates.

An agreement between spouses to divert the rent into one account would not change who is legally "entitled" to it under property law and, by extension, tax law.

 

[Bronte]

Income follows beneficial ownership; if the property is jointly owned, the income is split accordingly.

A property can be legally owned by one person but another might be the be beneficial owner? I think we had a thread on it it recently.

 

[torblednam]

A property can be legally owned by one person but another might be the be beneficial owner? I think we had a thread on it it recently.

Absolutely it can, and it's the beneficial owner(s) that are entitled to rents from a property.

I'm not really sure how that distinction would be relevant in the fairly common & straightforward case of a rental property jointly owned by a couple. In that case the legal and beneficial ownership will be the same.