what tax liable when mortgage repayments are higher than rental income

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pflangan

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hi. can anyone give me some advice on what tax we are liable to pay on income from a rental property we have. we are resident in the uk now and have an investment mortgage from an irish bank with repayments of €2500 monthly. the most we will achieve in rental income is €1400 a month. we have no other irish income as we have moved to the uk now but want to hang on to our irish home. i phoned the revenue but they could not tell me what if any relief we would have. also a letting agent mentioned that non residents pay at 20%. again the revenue guy just sent me out a leaflet with general info telling me i would find answers there. any advice would be great.
 
The fact that mortgage repayments exceed rental income is irrelevant. You are liable for income tax on rental income less any allowable expenses (including mortgage interest). Not sure what the implications are of you not living here. You should get independent, professional advice when assessing your liabilities and making your tax returns.
 
is mortgage interest still deductable on an investment mortgage? thanks for info will look into getting advice.
 
Interest on a mortgage used to purchase or renovate an investment property is allowable against rental income. What do you mean "still"?
 
i thought there may have been more restrictions on allowances when it was an investment mortgage rather than an owner occupier's mortgage, hence the "still".
 
Not sure what you mean by "more restrictions" but I suspect that you're confusing owner occupier mortgage interest tax relief (at source) with the fact that investors can offset 100% of interest on loans used to purchase/renovate their investment property against rental income. These are two completely different issues.
 
yes that is what i was doing. i realise now. in my case the mortgage interst is about the same as the expected rental income so i may not be liable for much.
 
on that subject of registering as landlord. do you still have to register if you are renting your property as a holiday let on a week by week basis?
 
ClubMan said:
Not sure what you mean by "more restrictions" but I suspect that you're confusing owner occupier mortgage interest tax relief (at source) with the fact that investors can offset 100% of interest on loans used to purchase/renovate their investment property against rental income. These are two completely different issues.
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There use to be a "restriction" on the use of mortgage interest against rental income Basically a mortgage taken out after passing of Finance Act 1998 on 23/4/1998 could not be used against rent earned. The restriction was lifted in Finance Act 2002 for the tax year 2002 et seq.
 
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