Advice on allowable tax expenses when vacant investment property sold?

M

Miakk

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I hope someone can help with an investment property tax-related question, just on time for the file and pay deadline for 2023!

I let my former home for a number of years, all was compliant re, Revenue, RTB, NPPR etc.

My long-term tenants gave notice and vacated the property at the end of Oct 2022 and I decided to sell, so it was on the market by Dec 2022. Due to various delays (largely due to the solicitor on the purchaser's side) ownership was not exchanged until June 2023, up to which time I continued to pay the mortgage and mortgage protection.

There was no rental income during the year 2023, but are mortgage interest and mortgage protection for the property allowable expenses for the purpose of my 2023 Tax return?
 
Allowable expenses against what?
You may of course have CGT liability but cannot write off mortgage interest or protection against this?
Check CGT dates here....

Capital Gains Form CG1

Is there somewhere that gives a simple step by step guide on how to complete this form?
www.askaboutmoney.com
 
Have you other rental income against which you could offset these costs? - they won't be offsettable against employment/PAYE income.
 
ClubMan said:
Can't these only be offset against rental income from the property in question?
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You may be right, but I thought Schedule D Case V (rental) income was calculated at tax payer level not at individual property level, but I am open to to correction...
 
Bank Manager said:
You may be right, but I thought Schedule D Case V (rental) income was calculated at tax payer level not at individual property level, but I am open to to correction...
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What expenses are allowed?

This page outlines the expenses you can deduct from your taxable rental income
www.revenue.ie www.revenue.ie

Mortgage interest​

You may be allowed claim Mortgage Interest Relief against your rental income. The interest must be from a mortgage that is used to purchase, improve or repair your rental property.
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That's a bit ambiguous. It could mean that interest paid on a loan taken out to purchase, improve or repair a particular rental property is deductible from rent from that particular rental property. Or it could mean that interest on a loan taken out to purchase, improve or repair the taxpayer's rental property in general is deductible against the taxpayer's rental income in general.

Reading TCA 1997 s. 97 I think the latter is the correct reading. Tax is charged under Sch D Case V in respect of "any rent in respect of any premises", and in computing that tax a deduction is allowed under s. 97(2)(e) in respect of "interest on borrowed money employed in the purchase, improvement or repair of the premises". "The premises" there refers to the "any premises" that are within the Sch D Case V charge to tax; there's nothing to suggest a distinct computation in respect of each separate property in the taxpayer's rental estate.

(But I could be wrong. Check with an actual professional, to whom you pay an actual fee, before staking your all on this reading.)
 
TomEdison said:
That's a bit ambiguous. It could mean that interest paid on a loan taken out to purchase, improve or repair a particular rental property is deductible from rent from that particular rental property. Or it could mean that interest on a loan taken out to purchase, improve or repair the taxpayer's rental property in general is deductible against the taxpayer's rental income in general.
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It's a long time since I did the course but I remember being told that mortgage interest is only allowable against the property in question, not against the portfolio.

This is also standard advice on AAM.
 
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