# "You are in receipt of Rental Income" letter from Revenue



## pipercadet (12 Aug 2008)

Got a letter from the Tax office recently " I understand you are in receipt of Rental Income" and to fill out attached form TR1 for Income Tax. 
My story bought my house in 2004 rented out 2 rooms last two years, recieve 8400 euros per year. Mortage payments 8160 per year. Never registered with tax, did i have to as small money (under threshold???). House is my primary residence. I am now not working, back studying.Worried about claw back penelties etc. any similar stories, advice, or solutions. Thanks a bit worried about it.


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## bleary (12 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*

Well one problem is that the limit was only €7,620 a year until I think it was last years budget so you would have been over the threshold


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## niceoneted (13 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*

Are you living in the house? Is it rented by persons privately or are they in receipt of rent allowance?


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## pipercadet (13 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*

yes, i wouldnt say i stay there a lot. but its still my primary residence. Also i think they could have applied for medical card, not in receipt of rent allowance, they asked about it ,as one of them was laid off for a while. i didnt sign anything, could of gone ahead anyway, caused this prob maybe.


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## csirl (13 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



> yes, i wouldnt say i stay there a lot. but its still my primary residence.


 
I suspect Revenue smell a rat here. Do you stay in the house more than 50% of the time?


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## ClubMan (13 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



pipercadet said:


> Got a letter from the Tax office recently " I understand you are in receipt of Rental Income" and to fill out attached form TR1 for Income Tax.
> My story bought my house in 2004 rented out 2 rooms last two years, recieve 8400 euros per year. Mortage payments 8160 per year. Never registered with tax, did i have to as small money (under threshold???). House is my primary residence. I am now not working, back studying.Worried about claw back penelties etc. any similar stories, advice, or solutions. Thanks a bit worried about it.


Given what you have posted in this thread so far I would suggest that you get professional tax advice on the matter ASAP. Even under the rent a room scheme you are supposed to declare the income (even if exempt) as far as I know. But in your case you were above the exemption threshold for a period of time as far as I can see and you may also not actually be an owner occupier.


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## pipercadet (13 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*

well i am there more than 50% of the time, yes it is my primary address etc. Will they throw the book at me altogether, that what i want to know.Does anyone know of how they delt with similar issues. I will be seeking prof advice.


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## ClubMan (13 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



pipercadet said:


> well i am there more than 50% of the time, yes it is my primary address etc. Will they throw the book at me altogether, that what i want to know. I will be seeking prof advice.


You need professional advice in my opinion.


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## cookie (13 Aug 2008)

Your situation from what you are disclosing, does not seem to have anything that would arise suspicion I would have thought.

You may have been rumbled by a random bank acc check up( do they can they do this??? I assume they can ... )  or not submitting a form 12 that may have been issued you ?

Have you anything else on the go that may have caused reason for a bit of a check up that may also complicate the issue ?

How do you think it was alerted to?


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## jhegarty (13 Aug 2008)

cookie said:


> Your situation from what you are disclosing, does not seem to have anything that would arise suspicion I would have thought.
> 
> You may have been rumbled by a random bank acc check up( do they can they do this??? I assume they can ... )  or not submitting a form 12 that may have been issued you ?
> 
> ...



or a tenant claiming rent relief....


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## cookie (13 Aug 2008)

jhegarty said:


> or a tenant claiming rent relief....


 

D'oh...


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## ClubMan (13 Aug 2008)

cookie said:


> Your situation from what you are disclosing, does not seem to have anything that would arise suspicion I would have thought.


What about the non declaration of total rental income that was in excess of the rent a room exemption limit?


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## sandymount (13 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



bleary said:


> Well one problem is that the limit was only €7,620 a year until I think it was last years budget so you would have been over the threshold



If you go above the threshold, you are liable for tax on the whole amount AFAIK.


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## ClubMan (13 Aug 2008)

Correct.


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## jhegarty (13 Aug 2008)

and stamp duty claw back


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## ubiquitous (13 Aug 2008)

jhegarty said:


> or a tenant claiming rent relief....



or a tenant being added to the electoral register at your address...


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## ClubMan (13 Aug 2008)

jhegarty said:


> and stamp duty claw back


If the property was rented out within 5 (pre Budget 2008) or 2 (post Budget 2008) of purchase as an owner occupier. The former seems to apply here so if the original poster is actually classed as an investor because they breached the rent a room scheme and/or are not actually deemed an owner occupier then the _SD _clawback could also be an issue.


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## Guest106 (13 Aug 2008)

Pipercadet -  The best way to deal with the Revenue is to be upfront,  open and honest about the issues involved.  You may fare better than you think.  They are very tough but fair too.
That's what I did and while the end result wasn't justice in the pure sense, it was acceptable to me in order to bring closure to a smallscale but irritating problem.  
That's what a lot of people have had to do with a lingering tax problem.
I can say positively that where you have profited however minimally from a 'tax oversight' it is very rare in the current taxation climate for them to leave emptyhanded.
As regards how you came to revenue attention, an acquaintance with seriously good revenue experience assured me once that where the revenue contact people with a tax payment claim out of the blue, the reason therefor is usually traceable to a third party and some very obvious activity or incident of recent occurrence, i.e. they don't hang about once they have your scent. 
Like that old saying...."there's death and there's taxes".


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## ClubMan (13 Aug 2008)

The best way to deal with _Revenue _where you are not aware of your liabilities etc. is through a professional tax advisor/accountant in my opinion.


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## csirl (14 Aug 2008)

Revenue profiling computer strikes again.


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## Clarkey (14 Aug 2008)

csirl said:


> Revenue profiling computer strikes again.


 
I have encountered approx 25 of these letters and all have been as a result of tenants claiming rent relief. Not sure if revenue profiling computer could profile whether taxpayers are more/less likely to have a rental property


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## bleary (14 Aug 2008)

It may just be as part of this 'crackdown'


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## Elphaba (14 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



pipercadet said:


> well i am there more than 50% of the time, yes it is my primary address etc. Will they throw the book at me altogether, that what i want to know.Does anyone know of how they delt with similar issues. I will be seeking prof advice.


 
Dont draw attention to the percenatge amount of time you are at the house, or they will definately smell a big rat. Its your primary residence and thats that. Revenue don't have a spy sitting across the road, so just be clear on that.


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## circle (14 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



pipercadet said:


> well i am there more than 50% of the time, yes it is my primary address etc. Will they throw the book at me altogether, that what i want to know.Does anyone know of how they delt with similar issues. I will be seeking prof advice.


 
Did they send the letter to this house or to the other place you stay? That might indicate whether they're acting on the assumption that it is your primary residence or not.


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## MandaC (14 Aug 2008)

Having exhausted the "offshore assets" investigations, rental income and in particular stamp duty clawbacks (ftb) was next on the agenda.  I posted about it here ages ago.

Also on the go at the moment is the one where they are investigating deposit accounts that had more than €100K in them.  See here.

http://www.finfacts.ie/irishfinancenews/article_1013693.shtml

You will need professional tax advice. Tax advisor or Accountant to negotiate on your behalf. If going to an Accountant make sure the Accountant specialises in tax and will deal with it personally and not just farm it out to a tax advisor, so you may end up paying twice.  Dealing with the Revenue is like anywhere else, a lot depends on the individual you get assigned to your case.


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## ClubMan (14 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



Elphaba said:


> Dont draw attention to the percenatge amount of time you are at the house, or they will definately smell a big rat. Its your primary residence and thats that.


Do you know that for a fact from the details posted so far? I'm not sure that there is no rat to smell here.


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## Iceman732 (14 Aug 2008)

1John said:


> Pipercadet -  The best way to deal with the Revenue is to be upfront,  open and honest about the issues involved.  You may fare better than you think.  They are very tough but fair too.



I agree with the above 100%. 

I also agree with everything Clubman has said. 

If the property is you PPR then I presume you are receiving TRS? There will also be CGT implications. 

Don't you just wish people would get advice before they do something instead of when they get caught by Revenue. It's really quite irritating!! 

Seek help!!!


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## Iceman732 (14 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



ClubMan said:


> Do you know that for a fact from the details posted so far? I'm not sure that there is no rat to smell here.



Wow that's an interesting double negative!

I notice someone said 'it's your PPR and that's that', I'd love to see that argument. Well Mr. Inspector of Taxes it's my PPR and that's that!

If he is renting the property out, which he is, part of the house will be subject to CGT. 

Once an individual is in receipt of rental income above the Rent-A-Room relief threshold then the entire income is subject to income tax, not just the excess.


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## ClubMan (14 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



Iceman732 said:


> Wow that's an interesting double negative!


Why so?


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## Iceman732 (14 Aug 2008)

*Re: you are in receipt of Rental Income letter!!*



ClubMan said:


> Why so?



No particular reason, I just hate the things! It takes me about five minutes to get my head around them!!!


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## csirl (15 Aug 2008)

> I have encountered approx 25 of these letters and all have been as a result of tenants claiming rent relief. Not sure if revenue profiling computer could profile whether taxpayers are more/less likely to have a rental property


 
Tenants claiming rent relief is one of the ways they find out, but the profiling computer has other ways. Revenue know who owns every house in Ireland as they collect stamp duty. So if you own more than one house then you are likely to be flagged by the profiling computer. Revenue can also find out even if tenants are not cliaming rent relief as Revenue knows every workers address. So if they have people living at an address who they know dont own the house or member of the owners family, its a fairly safe assumption that in the vast majority of these cases, the owner is receiving undeclared rental income.


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## Black Sheep (15 Aug 2008)

I don't think it makes any sense working out how the Revenue got their information. They have it and they will follow it up. Like many other posters I suggest you get a good tax adviser to sort it out, putting it on the long finger only worsens the situation


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## bond-007 (15 Aug 2008)

ubiquitous said:


> or a tenant being added to the electoral register at your address...


I don't think that really matters.


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## Graham_07 (15 Aug 2008)

Recently the chairman of the Revenue Commissioners said that long ago there was a saying "if only Revenue knew what Revenue knows". The RC are now discovering that they already know a lot of things which they just were not getting in the right places to be of use. This is now happening through REAP and other systems and we will be seeing a lot faster and more focused work on their part in the future.


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