# No "Case V" deduction for NPPR and the Household Charge.



## mandelbrot

_<I haven't had an argument with TMcGibney in at least a week, but this ought to get the ball rolling...>_

... according to this month's Tax.Point, TALC have met Revenue and been informed that as with the NPPR, there will not be a Case V deduction for the household charge.


_<...sit back and waits for all hell to break loose...> _


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## T McGibney

Hopefully this time Revenue will actually publish their decision, and their reasoning, instead of letting it leak out through the minutes of a TALC meeting, which have no statutory legislative effect.


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## ajapale

Whats Tax.Point?
Whats TALC?
Whats Case V?


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## mandelbrot

Sorry 
Tax point is a periodical on topical tax matters, from the institute of chartered accountants.

The Taxes Administration Liaison Committee (TALC) was established in 1989 and is a liaison committee between the Revenue Commissioners, the Irish Taxation Institute (ITI), the Consultative Committee of Accountancy Bodies of Ireland (CCABI) and the Law Society of Ireland.

Case V (the V being a roman numeral) is the Case under which rental income is charged to tax.


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## oldnick

Dear Judge,

I am a compliant tax-payer. I read whatever Revenue publish and abide by their advice and instructions. For example, in their Revenue guide IT70  it is states
_" the following give examples of what expenditure you may deduct when calculating your rental income_
_- rates payable to a local authority"_

I am unaware of  despite searches of any other advice given by Revenue to the any member of the npublic seeking that advice.


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## T McGibney

Section 97(2) TCA 1997


*97.*—(1)  Subject to this Chapter, the amount of the profits or gains arising in  any year shall for the purposes of Case V of Schedule D be computed as  follows:

 (_a_) the amount of any rent shall be taken to be the gross amount of that rent before any deduction for income tax;

 (_b_) the amount of the profits or gains arising in any year shall be the aggregate of the surpluses computed in accordance with _paragraph (c)_, reduced by the aggregate of the deficiencies as so computed;

 (_c_)  the amount of the surplus or deficiency in respect of each rent or in  respect of the total receipts from easements shall be computed by making  the deductions authorised by _subsection (2)_ from the rent or  total receipts from easements, as the case may be, to which the person  chargeable becomes entitled in any year.

 (2) The deductions authorised by this subsection shall be deductions by reference to any or all of the following matters—

 (_a_) the amount of any rent payable by the person chargeable in respect of the premises or in respect of a part of the premises;

 (_b_) any sums borne by the person chargeable—

 (i) in the case of a rent under a lease, in accordance with the conditions of the lease, and

 (ii)  in any other case, relating to and constituting an expense of the  transaction or transactions under which the rents or receipts were  received,

 in  respect of any rate levied by a local authority, whether such sums are  by law chargeable on such person or on some other person;

 (_c_)  the cost to the person chargeable of any services rendered or goods  provided by such person, otherwise than as maintenance or repairs, being  services or goods which—

 (i)  in the case of a rent under a lease, such person is legally bound under  the lease to render or provide but in respect of which such person  receives no separate consideration, and

 (ii)  in any other case, relate to and constitute an expense of the  transaction or transactions under which the rents or receipts were  received, not being an expense of a capital nature;

 (_d_)  the cost of maintenance, repairs, insurance and management of the  premises borne by the person chargeable and relating to and constituting  an expense of the transaction or transactions under which the rents or  receipts were received, not being an expense of a capital nature;

 (_e_) interest on borrowed money employed in the purchase, improvement or repair of the premises.


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## mandelbrot

oldnick said:


> Dear Judge,
> 
> I am a compliant tax-payer. I read whatever Revenue publish and abide by their advice and instructions. For example, in their Revenue guide IT70 it is states
> _" the following give examples of what expenditure you may deduct when calculating your rental income_
> _- rates payable to a local authority"_
> 
> I am unaware of despite searches of any other advice given by Revenue to the any member of the npublic seeking that advice.


 
Why would it end up in front of a judge though Nick?!

Are you saying that if you got an audit and,
1. they bothered to make an issue of the non-deductibility, and
2. said give us €150 + interest (penalty negotiable but should be nil as what you've outlined could be deemed a technical adjustment),
3. you'd say no way josé, let's go to Appeal, and then
4. if the Appeal commissioner finds against you,
5. you'll go to Circuit Court, over €150 a year of tax...?!

In which case I would have to admire your willingness to stick to your principles!


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## mandelbrot

The most pertinent parts of this being:



T McGibney said:


> Section 97(2) TCA 1997
> 
> ....
> 
> *(2) The deductions authorised by this subsection shall be deductions by reference to any or all of the following matters—*
> 
> ....
> 
> *(b) any sums borne by the person chargeable*...
> *in respect of any rate levied by a local authority,* whether such sums are by law chargeable on such person or on some other person;


 
I knew you wouldn't be able to resist McGibney!


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## z107

mandelbrot said:


> In which case I would have to admire your willingness to stick to your principles!



I'm currently in dispute with the Revenue for a sum of €2.85.

If someone feels that they have been wronged by the Revenue, then surely they should proceed by whatever means necessary to resolve the case?

I certainly will not be handing over even a cent more than I'm legally required to.


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## T McGibney

mandelbrot said:


> I knew you wouldn't be able to resist McGibney!



Er, I haven't said anything  I just copied the legislation to inform other users of what the law actually says 

Btw, if you are in a position to disclose the source of the quote in your opening post, that would be great. Thanks.


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## mandelbrot

umop3p!sdn said:


> I'm currently in dispute with the Revenue for a sum of €2.85.
> 
> If someone feels that they have been wronged by the Revenue, then surely they should proceed by whatever means necessary to resolve the case?
> 
> I certainly will not be handing over even a cent more than I'm legally required to.


 
Well each to their own - to me €2.85 has a fairly limited value, I certainly wouldn't see myself investing hours of my time to recovering it... an irate phone call or two maybe, but a protracted dispute I don't think so.

I'd rather go to the pub and give out about the €2.85 that Revenue did me out of! But as I said, each to their own. But based on our previous exchanges on other threads, you clearly have a bee in your bonnet about Revenue, so I'm sure that might be an added motivation to you...!


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## mandelbrot

T McGibney said:


> Er, I haven't said anything  I just copied the legislation to inform other users of what the law actually says
> 
> Btw, if you are in a position to disclose the source of the quote in your opening post, that would be great. Thanks.


 
It's in the current (January 2012) edition of taxpoint, I saw it online earlier, but it's subscription only, so I can't link to it...


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## mandelbrot

umop3p!sdn said:


> Not specifically Revenue, but more the government.
> Aren't the government due to be paying more billions out today? - (The day of Ivor Callely's arrest)
> 
> The Revenue are collecting money for the State, so I would have a 'bee in my bonnet' about that.
> 
> Anyway, all this is OT.


 
I'll indulge our foray off topic with one more observation - in the 7+ years I worked in practice, I never saw anyone get in a row with Revenue over amounts like €2.85 - plenty of times I saw people *not* get in a row over that kind of money, and yet not have to pay it... 

Now I know times may have changed but I still don't think anyone in Revenue is going to dig their heels in over that kind of money without feeling a reason to do so. it would appear there's been a failure in diplomacy on both sides...


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## oldnick

Mandelbrot or TMcGibney- whose opinions  i respect  can either of you could state *why* the NPPr and Propety Charges are not deductible (- without quoting from some private or unofficial source.)

The Act quoted above with specific reference to 2bi would seem to add credence to my belief that these charges are deducible:-
They are both rates, in so much as they are a charge on property to pay for the provision of services of local authorities.
They are both levied by the local authorities in so much as it is to the local authorities that one makes payment and it is the local authority that can decide whether one is exempt or not.

I gather that a Revenue official  stated ,though not publicly nor in any tax briefing, that he believed that "levied" could ONLY mean something that was  introduced and imposed by the local authority. Therefore  the NPPR and PropCharge were not included in 2bi as "they were not levied by a local authority."


His belief can de disputed in three wasy :-
- the semantic argument as to what does "levied" mean.
- in other EU state such charges are tax deductible
- and above all the question of literal interpretation versus the intent of the legislation. Increasingly in legal disputes the intent of the legal phrasing is considered more important than a literal interpretation. So, unless central government deliberately intended and stated that NPPR/P.C. are nondeductible and if the Act  states that local rates are deductible, thenm it is an arguable case that all such charges are deductible.


I wonder why accountants without any official words from Revenue advise their clients   not to deduct these charges,considering:-
-there's only a small chance of a Revenue audit and if the client is otherwise above board why should he care?
- Even if the Revenue auditor insisted these charges were nondeductible do accountants really believe that he'd impose a penalty ,especially if one showed him Revenue's own printed advice as per IT70 ?
- Surely the most that would happen is one would pay what one owes with ,possibly, some interest.

Consider, accountants,  the savings one makes if one deducts these charges over, say ,five years:-
Say one lets ten properties- that's presently a cost of 3.000 euros x 5 years = 15.000 euros. That's a tax saving on ca. 7.500 euros if one deducts these charges. 
And as charges may increase the savings get bigger.

It's crazy not to deduct them -and increasingly costly.


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## T McGibney

oldnick said:


> Mandelbrot or TMcGibney- whose opinions  i respect  can either of you could state *why* the NPPr and Propety Charges are not deductible (- without quoting from some private or unofficial source.)



Me? No. Non-deduction makes no logical sense to me. That said, Revenue have stated otherwise, albeit unofficially, and it would be foolhardy of me, as a general tax practitioner, to tell everyone that Revenue, and their specialist experts,  are wrong and my own reasoning is correct. People can make up their own minds as to whether they want to deduct these costs. I'll keep an open mind on it.


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## DB74

The charges are non-tax-deductible because they are *collected* by the local authority as opposed to being *levied* by them (levied is the wording in the legislation). Unlike commercial rates, the local authority themselves do not decide how much to charge.


Letter from Inst of Tax to Revenue (23-Sep-2010)




Letter from Revenue  18-Oct-2010 in response




Here's some info from the Inst of Tax. They state that the NPPR isn't deductible but don't actually say why.


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## oldnick

The letter from the Revenue official ends with a promise "to arrange a tax briefing in the near future ".
this was in October 2010. Has there been such a tax-briefing on this subject?

If no, then it was an incorrect statement from that official. Therefore what credence can be placed on any other statement in that letter ? 
That's besides the suspicion that the non-appearance of such a promised tax briefing raises doubts within Revenue as to the solidity of his argument.

As regards the statement he made concerning deductibility of NPPR I stick to my view that this is a semantic argument, and, in any case, the intention of the relevent clause in the Act is that rates are deductible. Yes,the Act says "levied" not "collected" but until such time as the govnt,Revenue or Uncle Tom Cobley states otherwise it is a costly madness to not deduct these charges.


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## oldnick

Looking up * levy(verb),levied* in Concise Oxford Dictionary - to impose or collect a tax 
Same for Websters - impose or collect.

Swift writing about the inhabitants of Lilliput.....
"_the pension for the education and entertainment of a child is levied by the emperor's officers_"  -clearly Swift means collect.


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## mandelbrot

oldnick said:


> Mandelbrot or TMcGibney- whose opinions  i respect  can either of you could state *why*  the NPPr and Propety Charges are not deductible (- without quoting from  some private or unofficial source.)


 All we have at the moment  is the reply from Eugene Creighton's office to the ITI Nick, so we'll have to work with what we have! 



oldnick said:


> The Act quoted above with specific reference to 2b(i) would seem to add credence to my belief that these charges are deductible:-
> They are both rates, in so much as they are a charge on property to pay for the provision of services of local authorities.


 In the letter, the Revenue official doesn't address the issue of whether the NPPR constitutes a rate, but does state that "there does seem to be a number of differences" between the NPPR charge and a rate. Because he is of the opinion that the charge isn't levied by the Local Authority, whether or not it is in fact a rate, is irrelevant.



oldnick said:


> They are both levied by the local authorities in so much as it is to the  local authorities that one makes payment and it is the local authority  that can decide whether one is exempt or not.
> 
> I gather that a Revenue official  stated ,though not publicly nor in any   tax briefing, that he believed that "levied" could ONLY mean something   that was  introduced and imposed by the local authority. Therefore   the  NPPR and PropCharge were not included in 2bi as "they were not  levied by  a local authority."


 The fact that the local authority are the collection agent, does not necessarily mean that they are the one levying the charge. This of course depends on the meaning of "levied" in this context.



oldnick said:


> His belief can de disputed in three ways :-
> - the semantic argument as to what does "levied" mean.
> - in other EU state such charges are tax deductible
> - and above all the question of literal interpretation versus the intent of the legislation. Increasingly in legal disputes the intent  of the legal phrasing is considered more important than a literal  interpretation. So, unless central government deliberately intended and  stated that NPPR/P.C. are nondeductible and if the Act  states that  local rates are deductible, thenm it is an arguable case that all such  charges are deductible.


 
- A lot of arguments that go before the courts about legislation are centred around what would be generally regarded as semantics - the meaning of "levied" in this context is a good example. Just because it is an argument about semantics doesn't mean it is a trivial matter. While you are entirely correct that the dictionary definition of levied is "imposed or collected", in an economics or tax context, levying a charge generally means imposing a charge.
- I don't see the argument about how similar charges in other EU countries are treated, as flying TBH, as every country has its own legislation.
- Intent is all well and good, but it will still boil down to 1. whether the charge is a rate, and 2. whether it is levied by the local authority.



oldnick said:


> I wonder why accountants without any official words from Revenue advise their clients   not to deduct these charges,considering:-
> -there's only a small chance of a Revenue audit and if the client is otherwise above board why should he care?
> - Even if the Revenue auditor insisted these charges were nondeductible  do accountants really believe that he'd impose a penalty ,especially if  one showed him Revenue's own printed advice as per IT70 ?
> - Surely the most that would happen is one would pay what one owes with ,possibly, some interest.
> 
> Consider, accountants,  the savings one makes if one deducts these charges over, say ,five years:-
> Say one lets ten properties- that's presently a cost of 3.000 euros x 5  years = 15.000 euros. That's a tax saving on ca. 7.500 euros if one  deducts these charges.
> And as charges may increase the savings get bigger.
> 
> It's crazy not to deduct them -and increasingly costly.



The reason may well be that these accountants have read the guidance from the ITI, as linked by DB74, or been told the same thing at tax updates organised by ITI. In light of that, it would be reckless for them to advise their clients to claim for items when the best available advice is that they aren't allowable - unless of course they believe that the Revenue position is incorrect and they tell the client that they may need to go to Appeal or beyond, to secure the deduction in the event of audit.



oldnick said:


> The letter from the Revenue official ends with a promise "to arrange a tax briefing in the near future ".
> this was in October 2010. Has there been such a tax-briefing on this subject?
> 
> If no, then it was an incorrect statement from that official. Therefore  what credence can be placed on any other statement in that letter ?
> That's besides the suspicion that the non-appearance of such a promised  tax briefing raises doubts within Revenue as to the solidity of his  argument.


No sign of the tax briefing yet - but it doesn't necessarily make him a liar - it all depends on your definition of "near future"..! 
 If it  makes you feel any happier as soon as I finish this post I'm  going to go  and start correspondence to Income & Capital Taxes Division, to see if an ebrief might be forthcoming on this topic...


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## Bronte

mandelbrot said:


> If it makes you feel any happier as soon as I finish this post I'm going to go and start correspondence to Income & Capital Taxes Division, to see if an ebrief might be forthcoming on this topic...


 
That would be really great Mandelbrot, this and the new charge are really costing landlords and to me it is a business expense and should be allowed as such, as all other charges are, whatever they are called/labelled etc.  

If they, revenue, can suddently decide themselves (no legislation) to allow mortgage 'term' life insurance they can certainly do the same for NPPR.  

We had a whole debate on this about a year or two ago on here.


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## Bronte

T McGibney said:


> Hopefully this time Revenue will actually publish their decision, and their reasoning, instead of letting it leak out through the minutes of a TALC meeting, which have no statutory legislative effect.


 
The reason they have not is that they are not sure, they are on shaky ground.


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## Bronte

umop3p!sdn said:


> I'm currently in dispute with the Revenue for a sum of €2.85.
> 
> .


 
I think you're great to pursue this.  

I wish the Irish Taxation Institute/Body etc would expend more time putting pressure on revenue on this cost of the NPPR/property tax. 

Oldnick I take it you actually claim it as a cost?


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## DB74

Bronte said:


> I wish the Irish Taxation Institute/Body etc would expend more time putting pressure on revenue on this cost of the NPPR/property tax.



Why?

In the greater scheme of things it's minor stuff. At the most it can cost a landlord roughly an extra €150 in tax, per property.

The 75% mortgage interest restriction is far more punitive and landlords would be better served attempting to get this provision reversed. A landlord who pays interest of maybe €800 per month will pay a total of €9,600 in interest in the year. 25% of this (€2,400) is disallowed so would cost the same landlord roughly €1,200 in extra tax per annum.

I know which provision I would be more concerned with sorting out.


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## mandelbrot

Bronte said:


> The reason they have not is that they are not sure, they are on shaky ground.


 
I wouldn't be so sure that that's their reason - it may be more likely that it's been overlooked or not deemed high enough priority for anyone to get around to issuing the briefing - they've probably got less staff trying to deal with more issues...

So I wouldn't conflate that delay in issuing a briefing with a fear on their part of being wrong. There's a long history of Revenue interpretations being overturned, and upheld, by the Appeal Commissioners and/or the courts, so it's nothing new, and I'm sure the people who make these decisions have fine sturdy necks by now!



DB74 said:


> Why?
> 
> In the greater scheme of things it's minor stuff. At the most it can cost a landlord roughly an extra €150 in tax, per property.
> 
> The 75% mortgage interest restriction is far more punitive and landlords would be better served attempting to get this provision reversed. A landlord who pays interest of maybe €800 per month will pay a total of €9,600 in interest in the year. 25% of this (€2,400) is disallowed so would cost the same landlord roughly €1,200 in extra tax per annum.
> 
> I know which provision I would be more concerned with sorting out.


 
To be fair I think they're 2 different types of issue - Bronte and others believe that the legislation doesn't actually disallow NPPR/HC deductibility, it's merely a matter of Revenue interpretation of existing statute, whereas "fixing" the interest issue would require a change in legislation.


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## Bronte

DB74 said:


> . At the most it can cost a landlord roughly an extra €150 in tax, per property.


 
I cannot fathom out this thinking at all.  €150 is a lot of money to be giving the taxman.  All these costs add up.  The costs have gone up dramically in the last couple of years, why do you think that you cannot give away investment properties?

Mandlebrot, here's the other post where we all debated this.

[URL="http://www.askaboutmoney.com/forumdisplay.php?f=36"]Property investment and tenants' rights   	>  Any definite answer on whether NPPR fee is tax deductible?[/URL]


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## oldnick

Many Thanks for your detailed reponse Mandelbrot.

I know that each of my points can be succesfully disputed, but collectively I believe that they represent a reasonable/arguable case. The lack of official advice from revenue would adds to my  belief. 

I didn't add one other point - the unsustainabity of imposing ever incresing charges on landlords who have to pay income tax on what may in fact be no income. 
(That is,  a landlords taxable profit is,say, 500 euros - pays tax of 250. Oh, and there's another 500 in property charges -pay that as well, please. For those "reluctant landlords"  making no profit because of high interest it may be the last straw).

Yes, it does make me happier that you'll be writing to the Revenue. Whilst you're at it could you drop a line to the rather meek Insitute of Taxation ?
I'm flying off to Florida on Tuesday for six weeks and by the time I get back I expect you -with TMcGibney's aid, as I do see you as some sort of perverse partnership - to have secured victory in this matter. 
And I wish to share some of the glory. 

(ps I didn't call  Mr Creighton a liar-wouldn't dare on AAM. Just said his promise of a tax briefing soon was incorrect which placed doubt on other statements. )


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## DB74

Bronte said:


> I cannot fathom out this thinking at all.  €150 is a lot of money to be giving the taxman.  All these costs add up.  The costs have gone up dramically in the last couple of years, why do you think that you cannot give away investment properties?



I meant in comparison to the 75% interest restriction which is costing landlords far far more money. Yet people seem to be more annoyed about the NPPR charge not being allowed.

BTW I have it on good authority that the government had planned to reduce this 75% to 60% in the last budget but for some submission they received setting out exactly the effect it is having on landlords and their cash-flow (or lack of it)

If you want the Institute of Tax or anyone else to concentrate on one aspect of the unfairness of the tax laws in relation to landlords and letting property, then it should be the 75% restriction and not the NPPR or household charge.


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## mandelbrot

oldnick said:


> Yes, it does make me happier that you'll be writing to the Revenue. Whilst you're at it could you drop a line to the rather meek Insitute of Taxation ?
> I'm flying off to Florida on Tuesday for six weeks and by the time I get back I expect you -with TMcGibney's aid, as I do see you as some sort of perverse partnership - to have secured victory in this matter.
> And I wish to share some of the glory.


 
As I'm neither a member of the Institute nor a LL affected by the issue at hand, it wouldn't really be proper for me to write to the Institute!

I also think the only victory likely to be forthcoming is that an ebrief may issue, but barring a major change of heart at high level in Revenue it'll only tell you what you don't want to hear - in which case your original argument for the judge is wrecked, because you'd have claimed something you were specifically told not to.

If that's the case, any final victory would be a long way away - someone would have to take a case to Appeal or beyond in order to have Revenue's interpretation overturned. (I suggest getting umop3p!dn on the case, if he'll fight over €2.85 he'll surely fight over €150... )

You're really enjoying rubbing it in about Florida - I wonder how many more mentions of it there'll be between now and Tuesday!


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## T McGibney

mandelbrot said:


> I also think the only victory likely to be forthcoming is that an ebrief may issue, but barring a major change of heart at high level in Revenue it'll only tell you what you don't want to hear - in which case your original argument for the judge is wrecked, because you'd have claimed something you were specifically told not to.



At least that would provide certainty to accountants who have to field questions from clients on this sort of thing on a routine basis and who have been waiting for the best part of 2 years for proper clarification which they can then pass on to their clients. The present uncertainty only adds to certain people's cynicism towards Revenue and tax compliance in general, and makes everyone's job harder.



mandelbrot said:


> If that's the case, any final victory would be a long way away - someone  would have to take a case to Appeal or beyond in order to have  Revenue's interpretation overturned. (I suggest getting umop3p!dn on the  case, if he'll fight over €2.85 he'll surely fight over €150... )



You may laugh, and I don't want to unnecessarily overdo the poor mouth, but €150 is a lot of money for some people these days, especially if they have no job and a property that they can neither finance nor sell.


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## oldnick

DB75 -The worry about various property charges is the certainty of increases. 

The loan interest that many (not all) landlords are paying will gradually decrease as they pay off their loans,  whereas the property charges will certainly increase for all landlords.  In a few years one could pay several hundred euros on a three bedroom house -more in Dublin . That's besides NPPR.  (And this is still less than in U.K.). 
For someone to pay 500 -1.000 euros on each rental property -without being able to claim a penny deduction - will be a disaster.
(And I wonder how the proposed household charge for TV/computer will be regarded? It won't be based on whetehr someone actually has  tv/computer. It'll be another property charge for the owner I reckon.)

But, of course, you're right to point out the hardship caused by decreasing interest relief. We should fight both causes.


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## mandelbrot

T McGibney said:


> You may laugh, and I don't want to unnecessarily overdo the poor mouth, but €150 is a lot of money for some people these days, especially if they have no job and a property that they can neither finance nor sell.


 
I have no doubt that it is, I'm sure we all know people who are in that boat. You can be sure I'm not laughing, €150 is a *huge* amount to me!

My previous glib comment aside, the problem about something like this is that somebody (has to - edit: ) may have to incur substantial cost to go through the due process necessary to challenge a Revenue interpretation.

So it's a pyrrhic victory for the individual who achieves it, but great news for everyone else - hence it would require someone who's willing to expend more time and money than they expect to benefit (which inspired my comment about the tenacious Mr Upsidedown!)


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## T McGibney

mandelbrot said:


> My previous glib comment aside, the problem about something like this is that somebody has to incur substantial cost to go through the due process necessary to challenge a Revenue interpretation.



Last time I checked, it cost nothing to bring a case to the Appeal Commissioners, unless the individual is paying for professional representation.

I don't know how a court victory over Revenue could be seen as 'pyrrhic' as the winner of the case would presumably normally stand to be awarded their costs?

I hope it isn't normal practice for Revenue staff to warn taxpayers that challenging their decisions at Appeal or in the Courts 'will incur substantial cost'. Sounds uncomfortably reminiscent of what the Dept of Health said to the dying Brigid McCole.


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## oldnick

As a vaguley on topic aside I'm paying on my Florida house 5.000 dollars every year property tax. It varies from state to state to generally 1 -2% of the estimated value of the house is levied (!) on a persons property. Fortunately it's deductible against income tax if one is renting.
Nearly every western state has property tax -the latest to introduce being greece  where my relations are having fits on receieving their bills.

My previous future estimate of 500-1.000 euros per property may be a low estimate

( Hopefully, i won't have a USA home in a couple of months . I'm off to sell it, as the bank won't extend my interest-only loan . So six weeks spent decorating and  trying to to sell direct and avoid the crazy 6% auctioneer commission. No Caribbean cruise I regret- just joy if I get even 75% of the price I paid during exuberant times six years ago.)


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## mandelbrot

T McGibney said:


> Last time I checked, it cost nothing to bring a case to the Appeal Commissioners, unless the individual is paying for professional representation.


 
Well unless they're well equipped to argue what would be a fairly technical issue (i.e. what is a rate, and what does levied mean in the context) then it's a bit of a David vs Goliath and fairly unlikely to have a happy ending without professional representation. Some people might be happy to do that, on principle, just to tie up the system, but if they've got got gainful employment / self-employment it's bound to cost them time if nothing else.



T McGibney said:


> I don't know how a court victory over Revenue could be seen as 'pyrrhic' as the winner of the case would presumably normally stand to be awarded their costs?


 
I think you might presume too much there; I don't think they automatically get their costs, or all of their costs, even if they win - maybe they generally will, but not always. 

And first they must win - I know you're taking issue with my pyrrhic victory reference, but it could just as easily be a loss, in which case they are certain to be out of pocket. (Again I'm not certain, but I'd imagine if the case was deemed frivolous the Judge could even find the plaintiff liable for Revenue's costs too? Not that I'm saying Oldnick's hypothetical case would be frivolous.)



T McGibney said:


> I hope it isn't normal practice for Revenue staff to warn taxpayers that challenging their decisions at Appeal or in the Courts 'will incur substantial cost'. Sounds uncomfortably reminiscent of what the Dept of Health said to the dying Brigid McCole.


 
I've never heard tell of any Revenue official, in their official capacity, saying that to a taxpayer. You've probably got more experience of dealing with tax auditors than I do, have you ever heard it? (I've certainly seen instances where people sitting around a table trying to reach a settlement have said, _I don't think anyone on either side wants to incur the time and cost of an appeal..._etc... but that's a different type of scenario.)

Anyway, I presume that it would be the responsibility of the solicitor etc. to advise the client at the outset how things might pan out, cost-wise.

So, in light of the above I'm going to edit my previous post to say _may have to_ instead of _has to_, if that's OK...


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## mandelbrot

T McGibney said:


> Last time I checked, it cost nothing to bring a case to the Appeal Commissioners, unless the individual is paying for professional representation.


 
I have to say, I think it's a bit disingenuous for you to say the above, given that I'm pretty sure you'd never advise someone other than a suitably qualified professional, to represent themselves at an Appeal hearing?

AFAIK the vast majority of Appeals are heard with the taxpayer having representation, and there is no facility for them to be awarded this cost.


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## Gekko

Correct - Costs cannot be awarded.

I've represented clients at a couple of Appeal Hearing and although it's effectively a less formal version of a Court, it'd be nuts for a taxpayer to represent himself/herself.

Interesting and all as this discussion is, my own view is that a landlord would lose at such an appeal.  The key point as others have suggested is the term "levied".  My understanding is that the NPPR charge and household charge are levied centrally by legislation (i.e. they're provided for and their rates are set by legislation arising at a national level) whereas (say) rates are set by local authorities.  On this basis, my own view is that they're not specifically provided for in Section 97 and they're therefore not deductible.

As an aside in relation to the purpose of the NPPR charge, surely the intention at government level is for it NOT to be deductible?  I would have thought the aim is to raise €200 times X number of properties, rather than something approaching half that amount if it's tax deductible?


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## Bronte

Not everything that is deductable is outlined in the Act.  

An ordinary person couldn't hope to appeal anything to the revenue appeal commissioners.  

DB74 the reasons us landlrods get very cross about this is because we only see this as a cost of doing business and as such we think it should be deductable.  I don't care what name they put on it and whether is is 'levied' 'charged' or whatever.

In relation to the 75% interest deduction, of course landlords are up in arms about this, and I had fully expected that tax write off to be reduced last budget.  The only reason they didn't is that the property market would have completely collapsed if they didn't.  I actually though was that the would reduce this and the market would have got flooded with all the recent first time landlords as they threw in the towel.  But at least for the 75% interest deduction the law is clear on this and I wouldn't be surprised if it actually goes back up to 100%.


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## callybags

> As an aside in relation to the purpose of the NPPR charge, surely the intention at government level is for it NOT to be deductible? I would have thought the aim is to raise €200 times X number of properties, rather than something approaching half that amount if it's tax deductible?


 
I think Gekko has it spot on.

If the government meant it to be tax deductible they would have set it at €400 to bring in the targeted amount.


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## mandelbrot

Bronte said:


> Not everything that is deductable is outlined in the Act.
> 
> 
> Bronte said:
> 
> 
> 
> Not everything that is deductable is outlined in the Act.
> 
> 
> 
> 
> It actually is, if you look at Section 97, which TMcGibney has already posted up in its entirety, the categories of deductible items are set out. I'll briefly summarise the overall gist (not verbatim before anyone jumps down my throat, but the gist of the thing as is relevant for this discussion).
> 
> Section 97(2) outlines the deductions allowed to be made in computing rental income.
> 
> _97(2)(a) - any rent payable by the chargeable person_ (eg. if the landlord is themselves a tenant who is sub-letting) - obviously NPPR/HC don't fall into this category
> 
> _97(2)(b) - any sums borne by the chargeable person in respect of any rate levied by a local authority_ (this is the one the debate has centred on, and if one concedes that the NPPR / HC aren't rates / levied by local authority, then there is no entitlement to deduction arising out of this subsection)
> 
> _97(2)(c) - the cost to the landlord of any services / goods (apart from R&M) which they are legally obliged to provide under the lease and don't receive separate reimbursement for. _(bin collection?! - NPPR / HC don't fall in here anyway).
> 
> _97(2)(d) - the cost of maintenance, repairs, insurance and management of the premises... being an expense of the transaction(s) under which the rents were received _(this catches most of the "normal" expenses - but since the NPPR / HC don't arise as expenses of renting, they don't fall in here, and a deduction under this subsection would require a concession similar to that for term life assurance).
> 
> _97(2)(e) - interest on borrowed money employed in the purchase, improvement or repair of the premises_ (the 75% limit is provided for elsewhere).
> 
> So, the bottom line is, if it doesn't fall into one of those categories, and in the absence of a Revenue concession to say they will treat it as if it does fall in (to 97(2)(d)), then there's no entitlement to a deduction.
Click to expand...


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## T McGibney

mandelbrot said:


> I have to say, I think it's a bit disingenuous for you to say the above, given that I'm pretty sure you'd never advise someone other than a suitably qualified professional, to represent themselves at an Appeal hearing?
> 
> AFAIK the vast majority of Appeals are heard with the taxpayer having representation, and there is no facility for them to be awarded this cost.



Disingenuous? No. Any taxpayer can challenge a tax assessment, and the determination(s) underlying same, at an appeal hearing. If a taxpayer is doing so, of course I would recommend to them that they engage an appropriate professional to represent them and/or mount their case.

But on the other hand, if they don't have the financial resources to pay a professional, or if they can persuade a friend/colleague to represent them for free or at a nominal cost, I would never advise them not to proceed.


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## T McGibney

mandelbrot said:


> _97(2)(d) - the cost of maintenance, repairs, insurance and management of the premises... being an expense of the transaction(s) under which the rents were received _(this catches most of the "normal" expenses - but since the NPPR / HC don't arise as expenses of renting, they don't fall in here, and a deduction under this subsection would require a concession similar to that for term life assurance).



I mentioned in a previous thread that buildings insurance costs 'don't arise as expenses of renting'. You can rent an uninsured property and a property can be insured regardless of whether it is occupied. Yet insurance is clearly an allowable expense for Case V. I don't remember anyone ever waiting for a Revenue eBrief or Tax Briefing 'concession' on this point.


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## mandelbrot

T McGibney said:


> I mentioned in a previous thread that buildings insurance costs 'don't arise as expenses of renting'. You can rent an uninsured property and a property can be insured regardless of whether it is occupied. Yet insurance is clearly an allowable expense for Case V. I don't remember a Revenue eBrief or Tax Briefing telling me so.


 
Well then there's a new angle to argue for a deduction! Or, conversely, maybe no-one is entitled to a deduction for insurance! (I knew you'd had something else up your sleeve the last time this area was debated!  )

But I don't see how it changes the position regarding the NPPR / HC. One could say that Revenue custom and practice in allowing insurance, confers an implicit concession. Whereas nothing of the like exists (yet) for the NPPR / HC...


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## T McGibney

Or it could be said perhaps that NPPR/HC falls within the ambit of the following:


> (_d_)  the cost of maintenance, repairs, insurance and management  of the  premises borne by the person chargeable and relating to and  constituting  an expense of the transaction or transactions under which  the rents or  receipts were received, not being an expense of a capital  nature;


?


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## T McGibney

mandelbrot said:


> One could say that Revenue custom and practice in allowing insurance, confers an implicit concession.



That would be a very dangerous road for them to go down.  Under self-assessment, people could be claiming under the radar  for all sorts of garbage, and any 'custom and practice' precedent could end up being trotted out for 'Dvd rentals', 'wages to children' and the like.


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## mandelbrot

T McGibney said:


> Or it could be said perhaps that NPPR/HC falls within the ambit of the following:
> 
> 
> 
> (_d_) the cost of maintenance, repairs, insurance and management of the premises borne by the person chargeable and relating to and constituting an expense of the transaction or transactions under which the rents or receipts were received, not being an expense of a capital nature;
> 
> 
> 
> ?
Click to expand...

 
You could say it but that doesn't make it so!

Returning to the issue of the deduction for insurance:
If I have a property let and I have it insured, I could argue I only have it insured because it is let, as it is more likely to burn down or be damaged etc with tenants in it...

Or maybe there is a concession, and it's just not known about because it was made so long ago.

Or maybe nobody's ever stopped and thought about it, to realise that while there's no strict legislative basis for it, there is a _de facto _operative concession.

In the case of any of the above I don't see there being anything to help justify a deduction for the NPPR / HC. And going back to what Gekko and Callybags said above though, if the legislators intent was for there to be a tax deduction I don't think there'd be such uncertainty TBH. (But having said that, we wouldn't be all enjoying ourselves arguing like we are without the uncertainty!  )


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## mandelbrot

T McGibney said:


> That would be a very dangerous road for them to go down. Under self-assessment, people could be claiming under the radar for all sorts of garbage, and any 'custom and practice' precedent could end up being trotted out for 'Dvd rentals', 'wages to children' and the like.


 
Well that's very different. Countless people have been audited, and produced amongst their records, the insurance receipt, as well as their rental accounts with the insurance deduction on it.

Those other nonsense items are routinely disallowed when discovered.


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## T McGibney

mandelbrot said:


> Returning to the issue of the deduction for insurance:
> If I have a property let and I have it insured, I could argue I only have it insured because it is let, as it is more likely to burn down or be damaged etc with tenants in it...



Its actually harder and more expensive to insure a property when it is unoccupied.


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## oldnick

callybegs/gekkos argue that if the govnt thought it would be tax-deductible they'd have raised the amount in order to collect the planned revenue.
two ripostes:-
A) Raising tax by a certain percent does not mean that the actual revenue collected is equal to that increase. People cheat and hide their income. People can't afford it and go broke and pay nothing. Indeed, sometimes a lowering of charges can result in an overall increase in revenue collected.
B) As in point A, many people can't afford the increases in a certain  charge ,whatever that charge may be . They cease trading or letting OR whatever. Making a NPPR/property taxes too high may mean many landlords throwing in the towel.  Therefore the overall "cost" of too steep an increase may be greater than the actual increase.

So I don't accept that the govnt deliberately intended this to be non-deductible otherwise they would have made NPPR and property charges much higher.


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## T McGibney

I, too, suspect that the 'intention at government level' basis for interpreting legislation is irrelevant here.

The day he introduced the Public Service Pension Levy, the late Brian Lenihan claimed it would yield €x million for the exchequer that year. Almost immediately, his figures were disputed and it quickly became clear that Lenihan and the government had forgotten that the Pension Levy would be deductible against tax, so the projected saving would accordingly be somewhere between 20-41% lower than initially expected. 

Revenue in that case could have argued that the Pension Levy should not be tax-deductible because the government had intended initially that it wouldn't be so. I don't think their case would have held up.


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## oldnick

Actually I wonder if the govnt thought about the deductibility aspect either way. 

In any case when I return to ireland I shall do my self assessment and state clearly that i'm deducting nppr and proeprty charges. My tax-expert representative at the ensuing Appeals thing shall be TMcGibney who'll  do it for nothing , if that is possible for a Cavanman


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## Knuttell

I have lost count of the number of threads on this subject both here and on other forums,the fact remains that Revenue have not stated whether this is allowable or not is frankly disgraceful and I don't care how busy they are,there should be no grey areas or second guessing in regards issues like this.


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## mandelbrot

Knuttell said:


> I have lost count of the number of threads on this subject both here and on other forums,the fact remains that Revenue have not stated whether this is allowable or not is frankly disgraceful and I don't care how busy they are,there should be no grey areas or second guessing in regards issues like this.



Without excusing the fact that no briefing has issued, I would imagine it's possible that Revenue don't see any grey area. They may be of the opinion that these charges clearly aren't rates, aren't levied by local authorities, and aren't expenses of a transaction giving rise to the receipt of rent, and that therefore there is no grey area. And iin the absence of any substantial level of lobbying / representations to them to suggest that taxpayers / agents are second guessing, then they may not see a pressing need to issue a clarification.


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## T McGibney

mandelbrot said:


> Without excusing the fact that no briefing has issued, I would imagine it's possible that Revenue don't see any grey area. They may be of the opinion that these charges clearly aren't rates, aren't levied by local authorities, and aren't expenses of a transaction giving rise to the receipt of rent, and that therefore there is no grey area. And iin the absence of any substantial level of lobbying / representations to them to suggest that taxpayers / agents are second guessing, then they may not see a pressing need to issue a clarification.



Why on earth don't they publish their view though? They see no problem with horsing out eBriefs on all sorts of obscure topics, almost on a daily basis. The fact that the ITI have engaged on correspondence with them on this topic should have signalled long before now to even the most elevated ivory-tower bureaucrat that this is a matter of public concern.


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## Bronte

T McGibney said:


> Why on earth don't they publish their view though? They see no problem with horsing out eBriefs on all sorts of obscure topics, almost on a daily basis. The fact that the ITI have engaged on correspondence with them on this topic should have signalled long before now to even the most elevated ivory-tower bureaucrat that this is a matter of public concern.


 
And I go back to the original thread on this and my viewpoint that revenue don't want to give a written decision as they are unsure of the law. Knuttel is quite right, revenue should tell us, after all it is their job to do so instead of sending waffly letters.   I note in this regard that this thread is very popular, and I presume a lot of landlords are reading it (and revenue)

Unlike oldnick I haven't put it in my tax return as my accountant has advised me not to. Oldnick did you put in an expression of doubt about it the first time you submitted or did you just fill out the tax return and leave it at that?


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## mandelbrot

It looks as though Revenue have updated the IT70:

http://www.revenue.ie/en/tax/it/leaflets/it70.html#section7

*What Expenditure Cannot Be Deducted?*


The following are examples of expenditure you may not deduct when computing your rental income or losses:

Pre-letting expenses, i.e. expenses incurred prior to the date on which the premises was first let apart from auctioneer’s letting fees, advertising fees and legal expenses incurred on first lettings,
Expenditure incurred between lettings in certain circumstances,
Interest in the period following the purchase of the property up to the time a tenant enters into a lease and after the final letting,
Post-letting expenses, i.e. expenses incurred after the final letting,
Capital expenditure incurred on additions, alterations or improvements to the premises unless allowable under an incentive scheme or incurred on fixtures and fittings,
Expenses incurred in the letting of premises on an uneconomic basis,
Expenses incurred on lettings that are exempt under the Rent-a-Room provisions,
*The charge on residential property (sometimes referred to as the second home charge) introduced by the Local Government (Charges) Act 2009.*


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## Gekko

So much for Revenue not confirming the position to the masses...


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## T McGibney

Well at least that clarifies things - at last.


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## Knuttell

Gekko said:


> So much for Revenue not confirming the position to the masses...



Only took them 2 years,good work fellas.


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## oldnick

So, by specifically mentioning only the second home charge (nppr) and not the property charge, (which has been introduced months ago- and which will eventually cost far more than the NPPR), does that mean the latter is deductible ? 
Or is it another two years of lack of official advice ?

Strange that the IT70 has been updated in the last few days .Which Revenue official is reading AAM !


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## Gekko

I've never seen a client claiming a deduction for the NPPR charge.

Every accountant I know is aware of Revenue's position (i.e. that the charge is not deductible). I've never seen a return where the charge has been claimed as a deduction. If a client insisted on claiming a deduction for the charge, their return's cover letter would have to be caveated appropriately.

Any AAM contributor with an interest in this topic knows the position and knows of the Institute's discussions with Revenue and Revenue's position as advanced during those discussions.

A year ago, if you Googled "NPPR+deductible+Revenue", top of the list were AAM threads like this and a link to the ITI's Q&A on the subject where Revenue's position is clearly stated.

I find it odd that contributors have been claiming a deduction for the charge when they've been well aware of the position. The "until I see an eBrief" argument doesn't cut the mustard in my view.

When the Big 4, the ITI, Revenue and every tax consultant on AAM have been advising people that the charge is not deductible, it's a bit rich to have to listen to posters still claiming that the position isn't clear.

Will these taxpayers now make a qualifying disclosure or technical adjustment in relation to any underpayments of tax which have arisen?


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## ajapale

No "Case V" deduction for Household Charge



oldnick said:


> So, by specifically mentioning only the second  home charge (nppr) and not the property charge, (which has been  introduced months ago- and which will eventually cost far more than the  NPPR), does that mean the latter is deductible ?
> Or is it another two years of lack of official advice ?
> 
> Strange that the IT70 has been updated in the last few days .Which Revenue official is reading AAM !




Has the position with regard to the _*House Hold Charge*_ been clarified?


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## Knuttell

Gekko said:


> Every accountant I know is aware of Revenue's position (i.e. that the charge is not deductible).




My accountant is of the chartered variety and when this was introduced first he told me to submit them and he would put it under misc sundries (or somesuch)
I wasn't really comfortable with that but let it ride but the next year when he asked for them I declined to claim it until the position was properly clarified,glad I did now but I wonder how many others got this advice not just off my fella but off other accountants?


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## mandelbrot

ajapale said:


> No "Case V" deduction for Household Charge
> 
> Has the position with regard to the _*House Hold Charge*_ been clarified?


 
Unfortunately not yet, as the IT70 leaflet only mentions the NPPR.

But since the bulk of this discussion has been about both NPPR & HC, maybe the thread title should be amended accordingly....?


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## oldnick

Gekko - Every piece of advice on this stemmed from one source  and one source only which was, in October 2010, a letter between Revenue and the Institute of Taxation (or whatever is the correct title). The latter body then issued a statement saying that "Revenue has indicated that NPPR is not tax deductible"-which other accountancy bodies started quoting.

Revenue's position -contrary to your assertion - was never clearly stated 

If you believe that this is a fair,democratic and transparent basis on which taxation decisions can be made I beg to differ.

Believe it or not, there are thousands of people,including landlords, who make tax returns without tax-accountants' aid.  Not all of them read AAM or similar sites. 

Those of them who choose to seek information may have turned to the Revenue's own guidance -leaflets, websites etc - where no advice on NPPR was given, the only advice was that local authority rates were deductible. 
Some people may have even read the relevent Act which I believe can be interpreted either way as regards NPPR deductibility.

As a directly relevent analogy:- two years ago Revenue issued rules and regulations on the Travel Agents Margin Scheme - basically the introduction of VAT in the travel trade.  Some of us travel agents questioned the rules. Within a few months Revenue re-issued the guidelines  because Revenue (can you actually believe this Gekko?) admitted  they were wrong.   (In fairness to Revenue it does state on their wesbite that they had to change their recently issued guideline  due to their incorrect understanding of the prevailing law).

During this period of disagreement with Revenue travel agents' accountants said that we must follow the Revenue guidelines (which in this case were actually published,unlike NPPR deductibility advice). It was left to individual travel agents and their trade body to point out that the original guidelines were wrong. No accountant raised his head above the parapets and argue with Revenue.

As accountants have told me -and as some have stated online - they believe this NPPR rule is nonsense , but ,frankly, they just weren't able/capable/wouldnt fight it.

And to answer questions on this :-I intend still to declare openly on my self assessment that I am/have deducting/ed this. I will welcome at least the opportunity to discuss this at various levels with Revenue. 
I feel the worst that will happen is that I'll pay a bit of tax and possible a smidgen of interest. (i may even get a  refund iif properly audited as I know I let slip several expences!).
 At best -with a bit of legal help -who knows ?

Last word-its not the NPPR per se that should worry all landlords. Its adding in the property charge which could quickly increase to large amounts that is the real worry.
I've already paid them for each of my properties this year .And yes I'm deducting this as an expence and saying so.


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## oldnick

yes-mcgibney you are ,as usual, right. We've gone around in circles on this.


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## T McGibney

Knuttell said:


> My accountant is of the chartered variety and when this was introduced first he told me to submit them and he would put it under misc sundries (or somesuch)
> I wasn't really comfortable with that but let it ride but the next year when he asked for them I declined to claim it until the position was properly clarified,glad I did now but I wonder how many others got this advice not just off my fella but off other accountants?


Sums up perfectly why experienced accountants are always reluctant to stick their necks out when dealing with Revenue on client affairs. When things go well, the client benefits. When things go wrong, the accountant gets blamed, normally totally out of context, as above, and their reputation is often impugned.

From my extensive reading of this entire issue, don't automatically assume that your accountant's advice was wrong. He may in time be proved right. If so, will you then thank him?


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## ajapale

mandelbrot said:


> But since the bulk of this discussion has been about both NPPR & HC, maybe the thread title should be amended accordingly....?



Title ammended.

Is the IT70 leaflet definitive?


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## T McGibney

Revenue forms, leaflets and website are *never* definitive, as per Revenue.


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## Knuttell

T McGibney said:


> Sums up perfectly why experienced accountants are always reluctant to stick their necks out when dealing with Revenue on client affairs. When things go well, the client benefits. When things go wrong, the accountant gets blamed, normally totally out of context, as above, and their reputation is often impugned.
> 
> From my extensive reading of this entire issue, don't automatically assume that your accountant's advice was wrong. He may in time be proved right. If so, will you then thank him?



I'm sorry but I have no idea what point you are trying to make?I  do not ask an accountant to stick their neck out whatsoever,*what I do want* is a competent professional who will complete a tax return compliant with the revenue rules and regs and that will stand up to an audit.

Surely if there was any doubt about the legitimacy of claiming this the accountant should have advised me to hold off til clarification was given?

I am not an accountant I hire those that are in order to best advise me,*second guessing him has proven me to be correct not him*,had I gone along with this I would now be in a position where I would have to repay Revenue a serious amt of money.

How will he be proven right in time and I will thank him?clarification has now been given that the *NPPR is not deductible as an expense *or am I living some Kafkaesque nightmare?


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## DB74

Knuttell said:


> I'm sorry b..



There are plenty of items in everyday taxation which are not black or white and require some professional interpretation of the relevant legislation.

Just because Revenue have decided that their interpretation of the legislation is that the NPPR isn't tax-deductible doesn't necessarily mean that it will hold up in court. It is hardly surprising that they have interpreted it to their benefit.

Ultimately one day it will be up to the courts of the land to determine whether the NPPR is tax deductible or not.

So your accountant may very well end up being proved right, in the long run.

I suspect he will be.


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## T McGibney

Knuttell said:


> I'm sorry but I have no idea what point you are  trying to make?I  do not ask an accountant to stick their neck out  whatsoever,*what I do want* is a competent professional who will  complete a tax return compliant with the revenue rules and regs and that  will stand up to an audit.
> 
> Surely if there was any doubt about the legitimacy of claiming this the  accountant should have advised me to hold off til clarification was  given?
> 
> I am not an accountant I hire those that are in order to best advise me,*second guessing him has proven me to be correct not him*,had I gone along with this I would now be in a position where I would have to repay Revenue a serious amt of money.
> 
> How will he be proven right in time and I will thank him?clarification has now been given that the *NPPR is not deductible as an expense *or am I living some Kafkaesque nightmare?



No need to jump down my throat, bold text and all 

There is genuine uncertainty as to the validity of Revenue's position in this case. This remains notwithstanding the amendment to IT70 which has just now emerged.  

His position has in no way been 'proven incorrect'

If your accountant had told you not to file your return until the matter was clarified, your 2009 return would still be outstanding, leaving you open to prosecution.

The tax system, and its administration, is indeed Kafkaseque in many respects. Particularly for those of us who work with it every day of the week.

I think your accountant was foolish to advise you as he did, for the reasons I set out above.


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## Knuttell

DB74 said:


> There are plenty of items in everyday taxation which are not black or white and require some professional interpretation of the relevant legislation.
> 
> Just because Revenue have decided that their interpretation of the legislation is that the NPPR isn't tax-deductible doesn't necessarily mean that it will hold up in court. It is hardly surprising that they have interpreted it to their benefit.
> 
> Ultimately one day it will be up to the courts of the land to determine whether the NPPR is tax deductible or not.
> 
> So your accountant may very well end up being proved right, in the long run.
> 
> I suspect he will be.



This is just going to run and run... However this is where I jump off,as far as I am concerned the Revenues position is now clear,I may not like it but there it is.


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## Jo1708

mandelbrot said:


> It looks as though Revenue have updated the IT70:
> 
> http://www.revenue.ie/en/tax/it/leaflets/it70.html#section7
> 
> *What Expenditure Cannot Be Deducted?*
> 
> *The charge on residential property (sometimes referred to as the second home charge) introduced by the Local Government (Charges) Act 2009.*


 
It seems a strange way to identify the NPPR (given that confusion also arises with the fact that you don't need to own 2 homes to be liable to it.) I don't know why they couldn't just call it the Non-Principal Private Residence NPPR levy to avoid any further confusion.


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## mandelbrot

It's a bit strange alright, maybe reflective of the vernacular of whoever wrote the piece, but the relevant identifier is the "*introduced by the Local Government (Charges) Act 2009"* part. There can be no ambiguity about what charge it is.


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## ajapale

I figure its something to do with the weird way the act is framed. It defines a residential property and then defines exemptions from the charge.


----------

