# Allowable tax deductions on rental income - Travel?



## dublin100 (18 Apr 2011)

Hello all,
I rent out a house in Dublin but live elsewhere in Ireland. Can I claim teh cost of petrol for when I have to show the house to new renters/inspect the house? thanks


----------



## kennyb3 (5 May 2011)

Yes, petrol/diesel for journeys to and from the premises in connection with the upkeep etc are allowed.

Keep a log of dates, mileage travelled and use a suitable mileage rate (see revenue.ie)


----------



## Tom189 (5 May 2011)

really??

Is there anywhere on the revenue site that mentions this? I cannot see it in ' A Revenue Guide to Rental Income - IT 70 '


----------



## Bronte (6 May 2011)

kennyb3 said:


> Yes, petrol/diesel for journeys to and from the premises in connection with the upkeep etc are allowed.
> 
> Keep a log of dates, mileage travelled and use a suitable mileage rate (see revenue.ie)


 
My understanding was that this was a tricky area with revenue.  What is your source for being allowed.


----------



## mandelbrot (10 May 2011)

kennyb3 said:


> Yes, petrol/diesel for journeys to and from the premises in connection with the upkeep etc are allowed.
> 
> Keep a log of dates, mileage travelled and use a suitable mileage rate (see revenue.ie)



No way that claiming a mileage rate is going to fly - if a sole trader can't claim mileage then there's no way a landlord is going to be allowed it.

I don't really see how any travel costs for a landlord can be allowed - surely the place of business for the letting of a property, is the location of the property being let?

Have you ever seen a claim for this type of expense being allowed in a Revenue audit?


----------



## Bronte (10 May 2011)

mandelbrot said:


> No way that claiming a mileage rate is going to fly - if a sole trader can't claim mileage then there's no way a landlord is going to be allowed it.
> 
> I don't really see how any travel costs for a landlord can be allowed - surely the place of business for the letting of a property, is the location of the property being let?


  There is a cost involved in travelling to collect rent, but whether revenue will allow it is another matter.  Landlords who do work (repairs) on their rental property are not allowed to deduct their own labour as a cost.  That's an example of a real cost but it's not allowed.


----------



## kennyb3 (10 May 2011)

mandelbrot said:


> No way that claiming a mileage rate is going to fly - if a sole trader can't claim mileage then there's no way a landlord is going to be allowed it.
> 
> I don't really see how any travel costs for a landlord can be allowed - surely the place of business for the letting of a property, is the location of the property being let?
> 
> Have you ever seen a claim for this type of expense being allowed in a Revenue audit?


 
Yes i have seen it allowed (on a concessional basis) but i should qualify this:

1) Mileage rate doesnt mean civil service rate, it would be at a much lower level

2) Mileage only claimed for trips relating to specific trips in relation to maintenance (not collecting rent as Revenue will obviously argue the use of EFT). This is the managing of the property

3) As already said detailed records are required.

So long as you arent trying to claim unrealistic expenses - such as 2*visits a week * 52 weeks a year * civil service rate - revenue are generally fair.


----------



## Bronte (10 May 2011)

kennyb3 said:


> 2) Mileage only claimed for trips relating to specific trips in relation to maintenance (not collecting rent as Revenue will obviously argue the use of EFT). This is the managing of the property
> 
> .


  Don't get this about the electronic transfers, revenue cannot tell you how to run your business?


----------



## kennyb3 (10 May 2011)

True but if they allow any expenses on a *concessional* basis, it is unlikely to be for trips to collect rent


----------



## T McGibney (10 May 2011)

'Concessional' really means at the whim of Revenue. If you're depending on a concession to stay out of trouble, and they change their minds for whatever reason, you're goosed.  This sort of situation is best avoided altogether.


----------



## mandelbrot (10 May 2011)

kennyb3 said:


> Yes i have seen it allowed (on a concessional basis) but i should qualify this:
> 
> 1) Mileage rate doesnt mean civil service rate, it would be at a much lower level
> 
> ...



Ah, ok I take your point, and I'd have no problem concessionally allowing a reasonable amount if I was auditing a case, but equally if I knew the guy was a chancer or tearing the This post will be deleted if not edited to remove bad language out of it, I'd have no problem disallowing it. I'd still rather just see a few petrol/diesel receipts though, rather than a mileage rate.


----------



## kennyb3 (10 May 2011)

mandelbrot said:


> Ah, ok I take your point, and I'd have no problem concessionally allowing a reasonable amount if I was auditing a case, but equally if I knew the guy was a chancer or tearing the This post will be deleted if not edited to remove bad language out of it, I'd have no problem disallowing it. *I'd still rather just see a few petrol/diesel receipts though, rather than a mileage rate*.


 
Agreed, although as im sure you know yourself the problem here is put €20 in car - €5 trip re visit to say fix a window and then €15 personal use.

I think your middle bit is the key - an acceptable, sensible level is generally okay. Claiming 52 weeks (when everybody has 4 weeks holidays) and a high level rate just screams chancer.


----------



## bullworth (10 May 2011)

I'm surprised to hear about this. What about properties which are abroad via a flight or ferry with car or even a drive across the border to the 6 counties ?


----------



## mandelbrot (10 May 2011)

bullworth said:


> I'm surprised to hear about this. What about properties which are abroad via a flight or ferry with car or even a drive across the border to the 6 counties ?



If you can prove that an expense is wholly and exclusively incurred in the furtherance of the trade, then you'll be allowed it.

If you tried to tell a Revenue auditor that you flew to England every month to collect the rent for your UK rental property, its just not going to wash! But if you spent a week over there overseeing maintenance work on the house in between tenancies (and this could be proven because you would have receipts with the appropriate dates etc. from the tradesmen, hardware shops etc.) then I don't see why the travel costs wouldn't be allowable.

Of course there may well be precedent from an Appeal or Case Law in this area and I'm talking through my hat...!


----------



## Bronte (11 May 2011)

mandelbrot said:


> If you can prove that an expense is wholly and exclusively incurred in the furtherance of the trade, then you'll be allowed it.


 
As I'm a landlord abroad I have had occasion to travel to Ireland on business, plenty of times I visited family as well but there were times where I had to come due to problem tenants only. I once asked on here and got a comprehensive reply on whether I could charge the trip, from an accountant on AAM I think, but it was someone who knew their stuff (Towager maybe if I recall correctly). Because it was 'wholly and exclusively' incurred yes I could charge it but the advice was not to as revenue don't like it and they might audit me so I never did charge it. It's a grey area as are so many areas with being a landlord and revenue.


----------



## bullworth (11 May 2011)

Bronte said:


> the advice was not to as revenue don't like it and they might audit me so I never did charge it. It's a grey area as are so many areas with being a landlord and revenue.



Whats the downside of being audited if you believe everything is above board ? Is there not an upside in that it wont happen again anytime soon or do revenue audit people again and again?


----------



## T McGibney (11 May 2011)

bullworth said:


> Whats the downside of being audited if you believe everything is above board ?



People invariably find Revenue audits time consuming and extremely stressful. 



bullworth said:


> Is there not an upside in that it  wont happen again anytime soon ?



That's a brave assumption for anyone to make.


----------



## mandelbrot (11 May 2011)

bullworth said:


> Whats the downside of being audited if you believe everything is above board ? Is there not an upside in that it wont happen again anytime soon or do revenue audit people again and again?



It may have been true in the past, but re-audits are becoming more common, indeed I believe as part of each audit district's annual plans they aim to re-audit a proportion of recently audited cases...


----------



## JoeB (11 May 2011)

Bronte said:


> ...   Landlords who do work (repairs) on their rental property are not allowed to deduct their own labour as a cost.  That's an example of a real cost but it's not allowed.



The problem here might be that Revenue would have to employ quantity surveyors and time analysis type people to avoid landlords claiming excessively for repairs.

Also, DIY repairs might take a lot longer than a professional repair, so why pay people for their own incompetence. 

I.E.. a landlord saying 'it took me five weeks to paint my house, please pay me'...


----------



## callybags (11 May 2011)

Claiming for your own labour would be a waste of time, because the value would be taxable as income.


----------



## Bronte (12 May 2011)

bullworth said:


> Whats the downside of being audited if you believe everything is above board ? Is there not an upside in that it wont happen again anytime soon or do revenue audit people again and again?


 
I've thought about that and thought about asking revenue to audit me so that I could be sure I'm doing everything correctly.  In recent times I've hired a very good accountant (thanks AAM) to put me even more on the correct path.  

I probably have an irrational fear of revenue but based on a sibling's recent dealings with them where everything was done correctly and the nightmare it was and still is (not an audit) I'll keep that fear.


----------



## bullworth (12 May 2011)

Bronte said:


> I probably have an irrational fear of revenue but based on a sibling's recent dealings with them where everything was done correctly and the nightmare it was and still is (not an audit) I'll keep that fear.



I know exactly how you feel. You can do all the right things yet worry about human error in calculations. Am I right in thinking that even a tiny sum in error for calculations such as share sales etc would get charged punitive interest over decades and that theres no statute of limitations where revenue is involved so it could end up as a huge liability?


----------



## mandelbrot (13 May 2011)

bullworth said:


> I know exactly how you feel. You can do all the right things yet worry about human error in calculations. Am I right in thinking that even a tiny sum in error for calculations such as share sales etc would get charged punitive interest over decades and that theres no statute of limitations where revenue is involved so it could end up as a huge liability?



You need to consider how would such a situation ever arise, that Revenue are looking at returns over decades. There is a time limit, except where fraud or neglect exists. This burden of proving fraud or neglect means that it only happens in investigation cases, where Revenue have strong suspicions of serious wrongdoing by the taxpayer - so small totting errors are not going to be an issue, it'll more likely be the few hundred grand tucked away offshore, or in prize bonds or something that'll cause the problem!! 

I've never in reality seen something as horrific as what you suggest happen, and even if a particular Auditor was inclined to be that much of a dog about it, I'd say a District Manager wouldn't want the thing going off to Appeal over something that at the end of the day is trivial...


----------



## bullworth (13 May 2011)

mandelbrot said:


> You need to consider how would such a situation ever arise, that Revenue are looking at returns over decades. There is a time limit, except where fraud or neglect exists. This burden of proving fraud or neglect means that it only happens in investigation cases, where Revenue have strong suspicions of serious wrongdoing by the taxpayer - so small totting errors are not going to be an issue, it'll more likely be the few hundred grand tucked away offshore, or in prize bonds or something that'll cause the problem!!
> 
> I've never in reality seen something as horrific as what you suggest happen, and even if a particular Auditor was inclined to be that much of a dog about it, I'd say a District Manager wouldn't want the thing going off to Appeal over something that at the end of the day is trivial...



I still have my Vodafone shares from the Eircom floatation probably mostly due to inertia because I don't have a clue how to figure out how much I have made or lost. I'm worried about making a mistake or not finding the correct documentation and its not worth enough to hire an accountant especially if I made a loss.


----------



## Bronte (13 May 2011)

That reminds me I sold Eircom shares at a profit and never declared anything.  Yikes.  Don't think they are going to find out about that now though.  Too long ago.


----------

