Astronomical Tax on Rental Income (me too!)

S

Skyler White

Registered User
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Similar to the other poster, I have nearly completed my return online for rented property and the total liability has jumped from over 3k to €8300. My salary has increased, but not by that much, however my health expenses were over €13,000 :( and I thought that would level the amount due.

I am jointly assessed along with my husband. I think I have entered everything required - Revenue has input a number of the figures from our P60s. The personal tax credit is displaying in a shaded areas as €3,300. I have deducted 85% mortgage interest and management fee.

Grateful for any suggestions before I have to jump to sell the property!
 
Unfortunately you will only get relief on your medical expenses at 20% and only get relief on tax paid. Your rental income is probably taxed at 40%.
 
relax carry on said:
Taxable profit. So what is the gross rental income less allowable expenses and capital allowances for tax purposes?
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I appreciate your assistance but I'm sorry, I can't work that out. I know I can't deduct mortgage payments, only the 85% Mortgage Interest Relief.

Are we entitled to claim the Employee Tax Credit (we are both PAYE)?
 
Skyler White said:
I appreciate your assistance but I'm sorry, I can't work that out. I know I can't deduct mortgage payments, only the 85% Mortgage Interest Relief.

Are we entitled to claim the Employee Tax Credit (we are both PAYE)?
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You are both entitled to the employee credit which is only available against your PAYE income.

Post up your rental figures if you wish. Is there any other source of taxable income which may be impacting it?
 
You can post your total rental income received, then a list of what expenses you have (eg insurance, repairs) and your mortgage interest payments. Do you claim the 12.5% per year for depareciation on furniture etc? No-one can tell, from the info you have provided so far, what the tax on the rental income should be.
 
Thanks grateful for the assistance.

Total rent is 11400 (950x12). I can't access my other figures as they are on the laptop at home.

I have never claimed for depreciation.

With regard to the employee credit and poster relax stating "which is only available against your PAYE income", to my understanding, there is only one area on the online form 11 that allows for this to be deducted so I don't know how the system will differentiate between PAYE income and rental income when allowing this credit. To be fair, when I ticked the Employee Tax Credit for both myself and my husband, the final amount due has reduced significantly.

(I know, I know I should get an accountant...)
 
Skyler White said:
Thanks grateful for the assistance.

Total rent is 11400 (950x12). I can't access my other figures as they are on the laptop at home.

I have never claimed for depreciation.

With regard to the employee credit and poster relax stating "which is only available against your PAYE income", to my understanding, there is only one area on the online form 11 that allows for this to be deducted so I don't know how the system will differentiate between PAYE income and rental income when allowing this credit. To be fair, when I ticked the Employee Tax Credit for both myself and my husband, the final amount due has reduced significantly.

(I know, I know I should get an accountant...)
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The system knows what income to put the employee credit against. If you are entitled to it, claim it. It won't allocate it to income it can't be used against.

Your main expense for the rental income should be your interest on you mortgage so long as you meet the criteria to claim it. You really should sit down with an accountant at least once to make sure you are recording your allowable expenses correctly and claiming capital allowances where due. Doing it once should allow you to file yourselves each year so long as nothing changes massively with the income stream.
 
Even if we took the Rental income of 11400 and multiplied by 50% the tax due (tax, usc, prsi etc) it would be 5750. So the OP figure of €8300 tax seems to be way off.

OP why are you not deducting wear and tear?
 
Bronte said:
Even if we took the Rental income of 11400 and multiplied by 50% the tax due (tax, usc, prsi etc) it would be 5750. So the OP figure of €8300 tax seems to be way off.
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His tax increased by 5,300 from 3,000 to 8,300 - that seems about right
 
If the original poster could put up a bit of detail about the property, how long owned, expenses etc we could give a more specific and detailed response.

To echo another poster the OP should consult an accountant, if only once, and put things on a firm footing to enable to fill out the form 11 going forward. The fee for an hour's consult will be well worth it in terms of hassle avoided.
 
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