# Travel Expense tax deductable



## Woodstown (10 Apr 2011)

I live in the USA and rent my irish house.  Can I deduct travel expense to Ireland against my irish tax?


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## beffers (10 Apr 2011)

I was in a similar position last year. I live in the US, inherited the family home and thought about renting it out. The tax advice I got (from H & R Block) was that as the US was my main residence, I could claim for tax relief in the US, but not in Ireland as I did not live in Ireland. 

I was told that if I was a US resident and I was a landlord with property over seas, I could claim the cost of one flight a year to Ireland, and one night in a hotel, as legitimate business expenses. Other expenses such as car rental and meals for one day were allowable. I could also claim for any refurbishment or remodeling expenses that I incurred doing up the house, as well as depreciation on the value of the property overall. The refurbishment had to be actual real work done such as putting in a new bathroom or kitchen or knocking walls down. It did not cover cosmetic touch ups such as painting the place or putting in new carpets. 

I have not lived in Ireland for 15 years, and have not paid taxes there for 15 years. If you have been generating income in both countries and paying tax in both countries, your circumstances may differ from mine.


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## Woodstown (10 Apr 2011)

*Irish Taxes*

Thanks for the reply beffers, great information for my US taxes.  My question is about deducting travel expense against my irish tax that I pay on the rental income in Ireland.


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## beffers (11 Apr 2011)

If you don't live in Ireland, I don't think that you owe the Irish Revenue any tax on income earned in Ireland. But as a US resident and tax payer, Uncle Sam will want his slice of any income pie that you earn, even if it is generated over seas. That is what H & R Block told me anyway.


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## Gervan (11 Apr 2011)

Income generated by Irish property is taxable in Ireland no matter where in the world you live. In fact, rent paid to a landlord living outside the country must have tax at the standard rate deducted and paid to the Collector General.
Beffers, if you do have rental income for 2010, you should get a second opinion on your tax position.


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## wheeler (11 Apr 2011)

*Landlords living outside Ireland*

http://www.citizensinformation.ie/en/housing/renting_a_home/tax_relief_for_tenants.html

*Excerpt relating to this post: *
If your landlord lives outside Ireland and you pay rent directly to them or to their bank account located in Ireland or abroad, you must deduct tax at the standard rate (20% in 2010) from the gross amount that you pay. *This deduction is not your tax relief - it is tax payable to Revenue from your landlord's income.* 
For example, say your landlord lives in Germany and you pay him/her gross rent per month of €1,000. Firstly, calculate the amount of tax to be deducted (€1,000 x 20% = €200). Now deduct the tax due from the gross rent you pay (€1,000 - €200 = €800 ). The net rent to be paid to your landlord is €800 per month. The amount due to Revenue is the €200 per month that you deducted from the gross rent of €1,000. 
*Accounting to Revenue for tax deducted from rent*
You must account to Revenue for the tax you deduct from the gross rent. If you fail to deduct tax from rent you pay to a landlord living outside Ireland, this will mean that you (and not the landlord) will be liable for any tax which should have been deducted. 
*If you pay tax under PAYE*, you can account for it by reducing your tax credits and Standard Rate Cut-Off Point. You can notify your local Revenue Office and ask them to arrange this. Alternatively, you can make a tax return - Form 12 (pdf) and pay the retained amount to Revenue. 
*If you pay tax under self-assessment*, you should include the details of your rent on your annual return - Form 11 (pdf). A notice of assessment will then issue to you, showing the reduced credit.
At the end of the year you must give your landlord a completed Certificate of Income Tax Deducted - Form R185 (pdf).


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## Mrs Vimes (11 Apr 2011)

Revenue states that travel costs to a foreign rental property (I would assume it also applies to your case) is only allowable if there is "no element of private purpose whatsoever" (here)

I get the impression from the tone that if you wish to claim travel expense as a deduction you'd better make sure not to run into any cousins or anything!

Beffers, if you have an Irish property rented out for the last 15 years and haven't been making tax returns in Ireland you should consider regularising your situation.

Sybil


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## beffers (11 Apr 2011)

Thanks for the advise, but I not actually rent out the house. I looked into it, but I decided to sell it instead.


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