# Tax to pay?



## Mammysboy (26 Aug 2010)

Hi,

I am Irish and live in the US. Rented my private residence in Dublin in Jan 2009. I understand from reading other threads that I will have to pay tax for  2009 by Oct 31 2010 and possibly make a pre-payment for 2010, correct?

2009
====
Annual Rental Income = 13800

Mortgage Interest=2740
Management Fee=1450
Letting Costs=1725
Advertising Costs=75
PTRB Registration=75
Repairs & Maintenance=100
Cleaning=150
Insurance=150

Total Expenses=6260

Net Rental Income=13800-6260=7540

Now, as I am non resident what % tax rate should I pay on 7540? I have no other income in Ireland or any other property anywhere. 

How do I calculate for ware and tare on the furniture etc? And finally how should I calculate the pre-payment for 2010...all expenses are about the same except for mortgage interest...annual income will be less.

Many thanks in advance for any responses. Finally, if someone could recommend a cheap on-line tax service to validate my return, that too would be very helpful.

Regards,
Mammysboy


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## shesells (27 Aug 2010)

Have your tenants not been witholding 20% of the rent to forward to Revenue? They should have been. Sounds like you need to talk to an accountant or Revenue about how to proceed for next year.


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## Mammysboy (28 Aug 2010)

No. It's rented through a letting agent and neither they nor the tenant have been withholding tax.

Any recommendations for an accountant with whom I can work with over email?

Is it 20% of 7540 that I would need to pay for 2009?


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## Armada (28 Aug 2010)

If you started renting from Jan 09, you probably can include a start up/ capital allowances figure for furniture etc.. This amount is then written off over 8 years at 12.5% per year.

Do you have to pay the NPPR charge?

www.nppr.ie


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## Mammysboy (28 Aug 2010)

Thank you, I forgot to include the NPPR charge as an expense.

Is it 20% or some other % that I will need to pay on the Net Rental Income?


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## PatriciaFox (29 Aug 2010)

As this is your only income in Ireland, can you claim the usual tax free allowance for income? ie tax free up to approx 7k..


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## Mammysboy (29 Aug 2010)

Hmmmm....sounds too good to be true, hope that I can!


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## twofor1 (29 Aug 2010)

Mammysboy said:


> I forgot to include the NPPR charge as an expense.


 
Revenue and the Department of Finance have indicated that the payment of the NPPR charge for residential properties is not an allowable expense in computing taxable rental income as it is not included on the list of allowable items. 

http://www.taxireland.ie/taxadvice/35760.aspx


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## xeresod (30 Aug 2010)

PatriciaFox said:


> As this is your only income in Ireland, can you claim the usual tax free allowance for income? ie tax free up to approx 7k..


 

You must be deemed resident for tax purposes to avail of personal credits.


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## Mammysboy (31 Aug 2010)

> You must be deemed resident for tax purposes to avail of personal credits.


That would seem logical to me.

So can anyone give me an answer to one of my original questions, as a non-resident landlord with no other income in Ireland, on a net rental income of about 7000EURO what % tax will I pay?


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## Leaky1 (31 Aug 2010)

Just to go back to the point about claiming tax credits/reliefs:

certain non-resident individuals are allowed to claim personal tax credits/reliefs under Section 1032 TCA 1997 - the tax credits (if due) are apportioned based on the Irish income as a portion of the total worldwide income.

e.g.
personal credit for the year is €1830
taxable Irish rental income is €5000
total worldwide income (incl Irish rents) is €15000
calculation: 5000/15000 x 1830 = €610
an apportioned personal credit of €610 is due.

If you check out the Revenue website and search for Sec 1032 TCA it will give you more details about who can claim this.

Perhaps you might get more replies on how to calculate the tax in the Taxation forum?


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## Joe_90 (4 Sep 2010)

Mammysboy,
You will be subject to tax at 20% on your rental income.  PRSI may also be due but if you can prove the Revenue that you are paying Social Insurance in another country they will waive this.


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## RMCF (5 Sep 2010)

Joe_90 said:


> Mammysboy,
> You will be subject to tax at 20% on your rental income.  PRSI may also be due but if you can prove the Revenue that you are paying Social Insurance in another country they will waive this.



Is it 20% or 41% ?

Someone told me recently I would have to pay 41% on my rental income if I decided to rent.

confused now.


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## WindUp (5 Sep 2010)

depends on what your total income from everything is
for a single person
€36,400 @ 20%, Balance @ 41%-- so if you have a paye employment with gross of 36400 or more , any additional income  rent or otherwise is taxed at 41%


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## RMCF (6 Sep 2010)

WindUp said:


> depends on what your total income from everything is
> for a single person
> €36,400 @ 20%, Balance @ 41%-- so if you have a paye employment with gross of 36400 or more , any additional income  rent or otherwise is taxed at 41%



Well I earn approx £31000 and the OH earns approx €40,000.

So would we pay 20% or 41% on the rental income?


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## WindUp (6 Sep 2010)

Are you resident?


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## RMCF (6 Sep 2010)

Resident as 'in the country'?

Yes we are about to move to a new house we bought, but were thinking of renting out the old one as its a bad time to sell.


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## WindUp (6 Sep 2010)

keeping this simple --i assume your salary is euro and not pounds  and that house is jointly owned - your total combined income is 71,000 -- the first 1800 (36800X2 less 71000) of your rental profit will be at 20% with the balance at 41% -- not sure if your employers pay any benefits such as VHI? but if they do; and you have not included it in your salary figures above then the amount taxed at the lower rate is reduced


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## RMCF (7 Sep 2010)

My salary is in STG, I work in NI.

Any idea how this affects everything?

Also, we got married 3 yrs ago, but the 1st house I bought (which might be getting rented out) is in my name only, and always has been. The mortgage is only in my name.

The new house will have both names on the mortgage and deeds.


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## WindUp (7 Sep 2010)

ah , then that pushes it all into the higher tax bracket as your salaries are higher ( you live and pay taxes in the republic i take it)


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## RMCF (7 Sep 2010)

WindUp said:


> ah , then that pushes it all into the higher tax bracket as your salaries are higher ( you live and pay taxes in the republic i take it)



No I still pay my taxes to the UK despite living in RoI.

Does this mean all my rental income will be taxed at 41%?

If so, I think I'll just try to sell up, that amount of tax is too much while trying to continue 2 mortgages.


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## T McGibney (7 Sep 2010)

Just for the sake of clarity, you are taxed at your marginal rate on your rental surplus, after deductions and capital allowances, not "all your rental income".


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## RMCF (8 Sep 2010)

T McGibney said:


> Just for the sake of clarity, you are taxed at your marginal rate on your rental surplus, after deductions and capital allowances, not "all your rental income".



I think I might need to find myself an accountant, cos to be honest this line is like double Dutch to me

I basically want to know is it worth my while renting out my old property now. I think if I was to have to pay over two thirds of it in tax then I would not be interested, as I will then have two mortgages to cover. If the rental income can't cover the mortgage premium then it might have to go.


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## dublin100 (21 Sep 2010)

*Re Interest*

Hi,
You can only claim 75% of the Interest on your loan, not 100%.


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## T McGibney (21 Sep 2010)

RMCF said:


> I think I might need to find myself an accountant, cos to be honest this line is like double Dutch to me



Its not that complicated surely? Put simply, you are taxed on your rental profit not the entire rent you receive.


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