# Preparing Tax Return on Rental Income



## dublin15 (21 Aug 2005)

For the last 12 months I have been renting my former home and am now preparing a Form 12. I lived in the house for over 5 years and when I moved residence I left most of the furniture behind. I have receipts for the furniture some of which is up to 4 years old. My question is can I write off at 12.5% a year any of this furniture or can I only write off new furiture that has been bought since I rented the property?


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## ClubMan (21 Aug 2005)

Does [broken link removed] answer your questions?


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## dublin15 (21 Aug 2005)

No, it does not specify. I assume its for new furniture only but Im looking for advice/opinions


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## Ham Slicer (23 Aug 2005)

The furniture has a value.

It will depreciate.

So you can claim CA on it.

Hope this helps.


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## dublin15 (23 Aug 2005)

Thank you for the reply.

Can I ask what CA is?

And can I claim on all the furniture or only that which has been purchased since the house became a rented property?


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## WizardDr (24 Aug 2005)

If this was your principal private residence for part of this 12 months .. Rent - a -room relief may apply.


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## Ham Slicer (24 Aug 2005)

dublin15 said:
			
		

> Can I ask what CA is?



The 12.5% write off you mention are Capital Allowances


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## dublin15 (26 Aug 2005)

Thanks again for the information.

Im still confused as to whether or not I can claim CA on furniture that was in house prior to the start of rental. Am i allowed claim CA on all furiture or only the new furniture that was bought specifically for the rented period?


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## delgirl (26 Aug 2005)

Hi Dublin15

Your property does not have to be newly kitted out to claim the 12.5% annual wear and tear allowance.

Just make an inventory of the fixtures and fittings and guesstimate their values as at the date of the first letting. 

Once the amounts claimed are _*reasonable*_ and once nobody is trying to pull a fast one, I don't think the Revenue are going to be unduly concerned about the exact valuations used, particularly if you've kept a comprehensive inventory of the contents of the house, and all other aspects of your tax affairs are fully in order. 

Good luck!
(I'm a landlord and not a tax expert - perhaps for your first return you might want to get professional advice?)


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## Ham Slicer (26 Aug 2005)

dublin15 said:
			
		

> Im still confused as to whether or not I can claim CA on furniture that was in house prior to the start of rental. Am i allowed claim CA on all furiture or only the new furniture that was bought specifically for the rented period?



Exactly what delgirl said


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## geri (26 Aug 2005)

Just another quick question along this line.  If repairs are carried out while the house is occupied, is the full cost of the repairs deductible, or just a percentage or the cost.  Things I'm talking about are wooden floor repair, some paintwork, replace door handles, new curtains etc.


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## delgirl (26 Aug 2005)

Hi Geri

Yes, you can deduct the cost of _*maintenance*_ and *repairs* in full during a tenancy - so this would cover your painting, floor repair etc.  You can only deduct these items if they were carried out by a tradesman and you have an invoice - you cannot claim for work which you have carried out yourself except for the materials used and you need to keep a receipt for these.

The new curtains, however, would need to be added to the property inventory and wear & tear claimed at 12.5% per annum over 8 years.

Hope this helps.


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## geri (26 Aug 2005)

Thanks for that Delgirl.  We carried out the work ourselves so are only planning to claim for cost of materials.  Have receipts for everything.


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## dublin15 (27 Aug 2005)

Thank you Delgirl for that information. I have receipts for all the furniture so hopefully this will reduce my tax bill.


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## dublin15 (31 Aug 2005)

Is there anything that can be claimed as an expence that might not be obivious to a first time landlord?? Maybe something that isnt listed on the Revenue Guide?


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## Glenbhoy (8 Sep 2005)

just in regard to the curtains, it may be easier to claim the curtains as a replacement cost ie claim in full for this year.  You would be allowed a capital loss on the old curtains, but it's probably easier to write them off in full (presumably they are not too valuable) in the year of purchase.  In the unlikely event of a revenue audit, you would have some sort of argument backing you up.  Also, I would'nt be averse to claiming a few euro in general expenses, these are not verifiable, but presumably you have not got receipts for all the work that's been carried out to bring the property to its present state, so there can be a bit of give and take on these things.


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## taxadvisor (8 Sep 2005)

Don't forget to claim incidental expenses such as telephone costs, advertising, solicitors, service charges (if you pay them).

Also,  Keep in mind that when you sell the house in future that you will most likely be liable to capital gains tax on the profit realised on the house from the time it ceased to be your principal private residence to the date of sale,


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## dublin15 (8 Sep 2005)

thanks for that info. I will have to keep telephone bills in future.


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## dublin15 (11 Sep 2005)

Apart from telephone costs which i had not included does anyone have other sugestions for reasonable expences that can reduce tax liability?


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## geri (13 Sep 2005)

If you've registered with the PRTB within the year you are doing the return for, you can allow for that aswell.


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## WizardDr (16 Sep 2005)

The one that the Revenue dont tell you about is Management visits. If you 'collect' the Rent (which may not be convenient) the Revenue could stop you caliming management visits. Again, if these are reasonable on the face of it, they would be allowed. If somebody does the 'hog' the would be queried.


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## dublin15 (20 Sep 2005)

could you give me an example of what I can claim under a Management Visit. Would I need receipts?


Thanks


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## ainsie (20 Sep 2005)

Question about the actual tax, between us myself and my wife will only reach about 53,000euro this year Married tax allowance @20 percent will be 58,400 or so. Our income after interest, expences etc on the investment property will be about 5000 which will just keep us under the 58,000 mark. My question is , if all that went before makes sence, will the income from my property be at 20% or at 40 % . Basicaly what I'm saying is ,is my income derived from the investment always at 40% or does it count as your yearly joint earnings.

Thanks

Tom


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## Glenbhoy (20 Sep 2005)

afaik it will be 20%, does not matter to an individual where it comes from, any profits above that will be at normal rates


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## clontarf (28 Sep 2005)

The Revenue Commissioners will all 10% of rental income for collection of rent.. THis was a great tip that I got from a company that files my returns.. My advice is use a tax professional to do your first return.. It costs me 360 per year .. Well worth it as this fee can also be claimed.. They will give you advice on all the tips and tricks.


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## geri (29 Sep 2005)

Clontarf,

Is this in some revenue guide somewhere?  I'd like to try to claim this, but haven't come across it befoe,
Thanks,
Ger.


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## Niallymac (29 Sep 2005)

Clontarf

Are you saying that you can charge up to 10% of gross rental income for collecting the rent ?  Surely what the revenue are saying is that up to 10% can be charged where you have suffered these costs via a letting agent etc ?  I get my rent direct debit, I wouldn't like to argue with the Rev that i am entitled to claim 10% of the gross annual rent for collecting it ?  I'd be delighted ifanyone else could verify this as a legitimate expense ?


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## ubiquitous (29 Sep 2005)

> Surely what the revenue are saying is that up to 10% can be charged where you have suffered these costs via a letting agent etc ?



This is indeed what they mean.


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## WizardDr (29 Sep 2005)

Hold on.

- Are you sure rent a room relief would not apply in your first year if you occupied the house?


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## markowitzman (29 Sep 2005)

Niallymac I am with you on this. Think that if one submitted this on return one would be asking for trouble from big brother! Am open to correction though (for obvious reasons!!).


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## markowitzman (29 Sep 2005)

Clontarf who is the tax advisor? Private mail me if this is easier. From another thread am looking for one.


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## dublin15 (29 Sep 2005)

Thanks everyone for your assistance. I submitted my Form 12 today. Decided to go alone rather than go to an advisor. Best of  luck to all other first time tax returners!


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## geri (25 Oct 2006)

Can anyone tell me where you fill in Wear and Tear Allowance on this year Form 12? Can it be filled in under "Other" in section 13, or does it go in under "Capital/Balancing Allowances for the year 2005".

Also, after capital allowances were deducted last year in my Form 12 submission I came up with a Loss.  Can I off set this against this years profit, or can I only off set a loss if it is before CA deduction.

Thanks,
Geri


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## asdfg (26 Oct 2006)

> The Revenue Commissioners will all 10% of rental income for collection of rent..


 
If you claim 10% letting expenses without actually paying it you have to declare it as income in your end of year tax return. 
Either way you pay tax on it. 
Better not to claim it in the first place.


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## asdfg (26 Oct 2006)

> after capital allowances were deducted last year in my Form 12 submission I came up with a Loss. Can I off set this against this years profit


 
If by capital allowances you mean capital expenditure - capital expenditure incurred on additions, alterations or improvements to the premises cannot be claimed against rental income 

See [broken link removed] and look at what expenses cannot be claimed for? and What expenses can be claimed for wear and tear?
So you may have a profit for last year?

If you actually have other capital allowances say from a Section 23 property please ignore the above. You can carry forward a loss each year until a profit is made.


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