# Rate of income tax for non-resident landlord



## Cathouse (1 Apr 2015)

Hi, I am doing tax return for a friend.  I have confirmed with Revenue that non resident landlords get no tax credits.  I cannot find on Revenue's website what the tax rate on this rental income is.  I saw a reference to 20% but I wanted more than that.    When I put the calculation in ROS it too says 20% I just wanted to read it somewhere!

Thanks


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## Sophrosyne (1 Apr 2015)

What is the amount of the rental profit?


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## Cathouse (1 Apr 2015)

Hi about €8,000....thanks


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## Sophrosyne (1 Apr 2015)

Hi Cathouse,

A non-resident landlord pays the same rates of income tax as a resident landlord.

As the income does not exceed €32,800 (for 2014), it taxable at 20%.

I assume you are aware that a non-resident landlord is entitled to the same tax deductions in arriving at the profit rent as an Irish resident landlord.

Also, in certain circumstances, for instance, if the landlord is an Irish citizen, he or she may be entitled to a proportion of tax credits.


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## Cathouse (7 Apr 2015)

Thanks Sophrosyne - sorry for delayed thanks.  I could not see that anywhere on Revenue.ie.  

Yes I have allowed same deductions in getting the profit.
Thanks again.


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## ronaldo (3 May 2015)

I work out my tax as above - basically I:

use the same tax deductions as a resident landlord;

calculate the proportion of Irish profit as a percentage of total worldwide income and allow myself that percentageof the €1,650 tax credit I'm entitled to;
pay Irish tax on the total profit;
claim the Irish tax as a credit against my UK tax return - where the rental profit works out different due to different tax years and different ways of allowing expenses such as mortgage interest and W&T allowances;
Don't pay PRSI as a non-resident;
Don't pay USC as my Irish rental income falls below the threshold where I'd be liable for it


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## gar32 (21 Jul 2015)

I am finding it all very confusing also. I called revenue and they told me I get no tax returned.  My tenant paid the 20% to revenue and I send in my form. Should I get cash back or just credits ? What use are credits ? I have read the list of things tax deductible. Why all the paper work if no money is returned?


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## asdfg (22 Jul 2015)

See attached from revenue especially Landlord not resident in the state   [broken link removed]
Click on IT 70 Guide to Rental Income


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## Bronte (23 Jul 2015)

gar32 said:


> I am finding it all very confusing also. I called revenue and they told me I get no tax returned.  My tenant paid the 20% to revenue and I send in my form. Should I get cash back or just credits ? What use are credits ? I have read the list of things tax deductible. Why all the paper work if no money is returned?


 
If your tenant paying the 20% means you've overpaid tax then you will get a refund from revenue when you submit your return.  Have you paid your LPT and previous years NPPR and household charge etc.


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## gar32 (23 Jul 2015)

The web site says Credits not tax return. 20% is not over paid. I has to be paid but I called and I was told no cash Tax back.

Has any one got a return I wonder.

thanks for info



*What If Your Landlord Is Not Resident In The State?*
If your landlord resides outside the Republic of Ireland (the State) and you pay rent directly to them or to their bank account either in the State or abroad, you must deduct income tax at the standard rate of tax (currently 20%) from the gross rents payable.

Failure to deduct tax may leave you liable for the tax that should have been deducted.

Example

Gross Rent per month €1,000
Deduct tax €200
Pay to Landlord €800

At the end of the year, you must give a completed [broken link removed]Form R185 (PDF, 175KB)* to your landlord to show that the tax has been accounted for to Revenue. The landlord can then claim this amount as credit on their annual Tax Return.

Where the non-resident landlord has an agent, who is resident in the State collecting the rent, you should pay the gross rent to the agent without deduction of income tax.

The agent is then chargeable to tax on the rents as Collection Agent for the landlord and is required to submit an annual tax return and account for the tax due under Self-Assessment. Leaflet IT10 - Guide to Self-Assessment provides more detailed information.


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## Bronte (23 Jul 2015)

Now I get what you mean by credits.  Either way when you do your actual return you will then have to either pay more tax or will get a tax refund (real money directly from revenue to your bank account) if the amount of tax was overpaid.

I don't let my tenants do this as no way am I risking them not paying revenue.  And don't get me started on Irish water.


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## sunnydonkey (28 Jul 2015)

"Don't pay PRSI as a non-resident;"

ROS charges PRSI to non-residents. not sure if thats correct or a bug....


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## T McGibney (29 Jul 2015)

sunnydonkey said:


> "Don't pay PRSI as a non-resident;"
> 
> ROS charges PRSI to non-residents. not sure if thats correct or a bug....


Not if the form is completed correctly.


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## gar32 (21 Oct 2015)

Update. I have finally sorted out my Tax as Non resident Landlord.  The tenants paid the 20% after 3 attempts. The 1st 2 times the people in the office did not understand what they wanted to pay. I am not worried about it as the tenant is liable and I gave the tax office their details. So  after receiving 7 reminders to do my tax for 2014. 5 of which where after I sent in the form. I also rang 3 times without help. A lady in revenue telling me I don't get a refund just makes me laugh now. I sent an email with as much info as I could about my issue. 3 weeks later I called again only to be told the email was read & the check was in the post.     I got about 26% of the tax paid back. I hope the new web site makes it easier for me next year


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## Bronte (22 Oct 2015)

gar32 said:


> . I am not worried about it as the tenant is liable and I gave the tax office their details.



I'm glad you got sorted but there is no way I'd want my tax to be paid by the tenants. 

What is the tenant liable for exactly?


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## T McGibney (22 Oct 2015)

gar32 said:


> Update. I have finally sorted out my Tax as Non resident Landlord.  The tenants paid the 20% after 3 attempts. The 1st 2 times the people in the office did not understand what they wanted to pay. I am not worried about it as the tenant is liable and I gave the tax office their details. So  after receiving 7 reminders to do my tax for 2014. 5 of which where after I sent in the form. I also rang 3 times without help. A lady in revenue telling me I don't get a refund just makes me laugh now. I sent an email with as much info as I could about my issue. 3 weeks later I called again only to be told the email was read & the check was in the post.     I got about 26% of the tax paid back. I hope the new web site makes it easier for me next year



Is the tenant ultimately liable? I don't think so. Check the 1998 Ombudsman Report. You are playing with fire here.


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## Cathalr (22 Oct 2015)

Hi guys,

I'm an absent landlord & need to complete a tax return for the last 2 years, the income 1 year is 4k & the next its 6.5k

I guess I need to pay 20% of that in tax, how do the tax credits work? Am I eligible for any considering I live abroad?

Thanks in advance!


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## gar32 (24 Oct 2015)

FYI
http://www.revenue.ie/en/tax/it/leaflets/it70.html

*What If Your Landlord Is Not Resident In The State?*
If your landlord resides outside the Republic of Ireland (the State) and you pay rent directly to them or to their bank account either in the State or abroad, you must deduct income tax at the standard rate of tax (currently 20%) from the gross rents payable.

Failure to deduct tax may leave you liable for the tax that should have been deducted.

Example

Gross Rent per month €1,000
Deduct tax €200
Pay to Landlord €800


At the end of the year, you must give a completed [broken link removed]Form R185 (PDF, 175KB)* to your landlord to show that the tax has been accounted for to Revenue. The landlord can then claim this amount as credit on their annual Tax Return.

Where the non-resident landlord has an agent, who is resident in the State collecting the rent, you should pay the gross rent to the agent without deduction of income tax.

The agent is then chargeable to tax on the rents as Collection Agent for the landlord and is required to submit an annual tax return and account for the tax due under Self-Assessment. Leaflet IT10 - Guide to Self-Assessment provides more detailed information.

*Note:* The agent appointed need not be a professional person, e.g.. they can be a family member or other person prepared to take on the responsibility and who undertakes to make annual tax returns and account to Revenue for any tax due.

*(Also available from Revenue’s Forms and Leaflets Service at LoCall 1890 306 706 (ROI only) or +353 1 7023050 or from your local Revenue office).

For additional information please refer to [broken link removed]Part 45.1.4 (PDF, 108 KB) of the Income Tax, Capital Gains Tax and Corporation Tax Manual.


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## Bronte (25 Oct 2015)

Cathalr said:


> Hi guys,
> 
> I'm an absent landlord & need to complete a tax return for the last 2 years, the income 1 year is 4k & the next its 6.5k
> 
> ...



Which years are you referring to. Don't you have any costs to deduct before you calculate the tax, don't you think it would be a good idea to hire an accountant.


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