Can you qualify for two Tax Free Allowances?

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Fisherman

Guest
Hi, first time posting so forgive me if I leave out some necessary information,
I have a property in the UK which I rent for £900 a month, this equates to £10,800(sterling) a year. I have expenses\costs and mortgage interest that normally keeps the “profit” to below £4,500. As a registered over seas landlord I qualify for the basic personal tax-free allowance which is £5,225, every year I submit a tax return and while the situation above is the case I don’t pay any income-tax on the annual rent.

I am an Irish citizen who lived in the UK for a number of years but have resided in Ireland for the last three years, I am a sole trader with an annual income of approx €50,000 a year.

My question is this, do I actually “qualify for two tax free allowances” or am I mislead,
e.g. as I declare the income in the UK do I then need to declare it in Ireland. If so do I declare I received £4,500 but as I have a UK tax free allowance then I don’t have to pay tax on the £4,500. Or does the £4,500 get added to my annual income and taxed at what ever rate it ends up at?

If the latter is the case then I think I have made a mistake because for the last few years once the “profit” from the annual rent fell below my UK tax-free allowance then I didn’t claim all the expenses that I could avail of e.g deprecation of fixtures and fittings etc.

As I still have to submit last years tax return to the Irish Inland Revenue, if I don’t qualify for the UK tax return then can I still use all the expenses that I didn’t use when I submitted my UK tax return on my Irish tax return ?

Hope I have given all necessary info in order to answer my question.
 
You probably need professional advice on this. What might be relevant is the double taxation agreement between the UK and Ireland provides for credits in one jurisdiction for tax paid in the other so that you don't pay twice. However, in general, I doubt that you are entitled to credits for the same tax in both jurisdictions.
 
ClubMan said:
You probably need professional advice on this. What might be relevant is the double taxation agreement between the UK and Ireland provides for credits in one jurisdiction for tax paid in the other so that you don't pay twice. However, in general, I doubt that you are entitled to credits for the same tax in both jurisdictions.
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U.k. rent is taxable here and must be included on your irish return. Credit will be given for any u.k. tax paid on this income.
 
Yes. But you have to declare it on your Irish return also meaning it probably will be taxed in Ireland. Your Irish return is totally unrelated to your UK return except in so far as if you pay tax in the UK it is then used as a credit against your eventual Irish liability. Your Irish rental return goes with the calendar year whilst UK it is up to 5 April. You therefore need to re-do your Irish rental income account including all proper income less expenses for the calendar year.
 
Thanks for the reply's, I understand now that the rent will have to be declared twice, once I don't go over the UK tax free allowance I won't pay tax on it in the UK but I will pay tax in Ireland so I will make sure that any possible expense is put against the rent received when I decalre it in Ireland.
 
Fisherman said:
Thanks for the reply's, I understand now that the rent will have to be declared twice, once I don't go over the UK tax free allowance I won't pay tax on it in the UK but I will pay tax in Ireland so I will make sure that any possible expense is put against the rent received when I decalre it in Ireland.
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I still think you're a little confused.

You do up your UK rental account i.e calculate your profit/loss. This is delcared on UK tax return.

You will not declare the same profit/loss figure on Irish Return as the two jurisdictions have different tax years and you will have to take that in to account.

I would suggest professional advice for the first year at least.
 
As Hamslicer says you complete the return in the UK.

You then make a seperate return to Irish revenue as though the property was in ireland. Any tax paid in the UK can be offset against the tax due in Ireland

See [broken link removed] for Rental income in general and " How are foreign rents taxed in particular.
 
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