Another Income tax on rental property question

[SarahO]

I know there are lots of questions relating to this area, but this is slightly confusing.

A friend of mine has a property that is his only property now, as he recently sold his PPR.
He has been renting this other out for some time, but has also been living n it part time due to his work commitments which means staying over 2-3 days a week, sometime less, sometimes more. This has meant he can gounder the rent a room scheme - is this correct ?

so with this in mind he has never submitted tax returns in relation to this property, as it was always earning an income of well below 10k per annum - in fact made a loss on it most years.
Now, he has decided to rent it out fully as he no longer lives there as such - He has recently renovated the property. painted, New fuirniture etc
Qst 1 - If a loss has been made on the income - is any tax expected to be apid, or does it need to be paid regardless ?
Qst 2. what is allowable against tax , I read something that advised the refurbhisments were no longer allowable for tax relief. - is this correct ?

Q3 . Can Management fees be allowed against tax.
Q4 . TRS has never been claimed and he has it 9 years - I assume this causes no issue - can enhance the argument if anything ?
Q5. Is th einterest on the mortgage paid allowable ?
Q6. The tax is at noaml income tax rates - i.e 42% ?

Hope you can help - he wants to ensure all correct income tax is paid going forward.

soc

 

[Graham_07]

I think you need to discount most of the issues here other than this :-

Where was his principal private residence over those years ? Wherever that was, the other property is not his PPR and is therefore an investment property. One can only have one PPR. Take it from there then.

As regards expenses, any expenses wholly and exclusively incurred for the investment property are allowable against rental income. These would include, management fees, Wear & Tear on Fixtures/fittings/equipment, management fees, insurance, etc.

One can only claim rent-a room-relief where one is renting a room/rooms in ones PPR. If it is not the persons PPR then it is an investment property and normal rent rules ( Schedule V of Case D of the Taxes Consolidation Act 1997 ) apply.

 

[SarahO]

Hi Graham,
Makes sense re: the PPR and clears up a lot, thanks for the response.