Withholding tax from non resident landlords

L

Lucycoo

Guest
Hi there

We operate a letting agency.

The issue of non resident landlords has recently come up.

Should we be withholding 20% of rent from non resident landlords?

It is my understanding that it is the tenants responsibility unless an agent us appointed in the state.

My question is by using us, is that them 'appointing an agent' in the state?

And do we have to submit tax returns etc for them?

As you can imagine, if this is the case, it makes dealing with this class of landlords very difficult. We can't be expected to know the tax affairs of these individuals.

I will be contacting my accountant on Monday but I would be grateful for any opinions
 
Hi

The obligations which attach to you as a collection agent for a non resident landlord are set out below.

3.2 Landlord:
The landlord is assessable in the name of the Irish agent (section 1034 TCA 1997). The agent should be set up under a new PPS number.

While the assessment is in the name of the Irish agent, the tax to be charged is the amount which would be charged if the non-resident landlord was assessed in his or her own right. Accordingly, as well as assessing only the profit rent, relief should be given for any personal tax credits to which the non-resident landlord is entitled.

Essentially you would get your accountant to take care of all this paperwork and pass on the cost to the non resident landlord. Failing to do this would leave you liable to pay the tax yourself.

Hope this helps

capnhand
 
Thanks for that.
Is the 'agent' automatically us?

Or Can the landlords appoint their own agent?
For eg, a friend or relative?

Are we really expected to get info from landlords such as
mortgage interest etc for rental profit calcs?
 
The answer to your questions depends on your (and the landlord's) definition of an agent.

Yes, an agent can do all you suggest depending on their technical / professional abilities and yes the landlord can appoint multiple 'agents' to do various bits of the letting, maintenance, compliance work and reporting; confusing for tenants and maybe even confusing for the various agents and the landlords.
 
Hi

Taken from the revenue guidance

Where rents are paid to a person whose usual place of abode is in the State, for example to an Irish based estate agent, acting on behalf of a non-resident landlord, the tenant is not obliged or entitled to deduct income tax. The non-resident landlord is chargeable in the name of the Irish agent. The Irish agent is not entitled to deduct tax from the rent on payment to the landlord but would normally retain sufficient of the rents to satisfy the tax payable on the rents. The agent should not issue an R 185 to the landlord.

So effectively whoever is paying over rent on behalf of the non resident landlord is classed as the agent. As the guidance states you are not entitled to deduct the tax but you can retain sufficient funds to pay any tax arising. It is up to the non resident landlord to give you the information and if they do not then you would consider filing the return based on the information that you have.

As mentioned you should entrust all of this it to your accountant and pass on the cost to the non resident landlord.

Regards

capnhand
 
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