Form 11 for 2023 and preliminary tax for 2024

W

Westgolf

Registered User
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Hi all,

Had a call with Revenue on Thursday last regarding the above.
Back story is that I have rental income on yop of my paye income. 2023 was the first year in a while that the rental property made a profit. I submitted the form 11 in May 2024 and received an assessment as expected. As far as I was aware I have until the 31st of October to discharge the liability, as assessed. No argument with this.

Revenue lady looking for preliminary tax details for 2024 which she stated "should have been completed at the time of submission of the form"

My issue is that if I did complete the preliminary tax assessment in May 2024 I would be doing a best guess / hope type of assessment. I can't predict repairs and damages etc or predict tenants moving on and the resulting voids and renewals due etc.

Am I missing something?? All feedback welcomed

Apologies for the length of the post.

Thanks

Westgolf
 
That's what happens when you rely on Revenue for "advice".

Pay & File day for income tax for 2023 and preliminary tax for 2024 is 14 November next.

The safest option is to pay the equivalent of 100% of your income tax bill for 2023 as preliminary tax for 2024.
 
@T McGibney
Many thanks for the speedy reply,

Say my assessment for 2023 is €2k for example. When I pay that over I'm paying for 2023, as assessed. Are you saying that I should just send a note stating that "this is 100% of the liability for 2023" as my preliminary return for 2024 .
 
That's not how it works. You just pay for 2024 via ROS.
 
OK,

So I pay the €2k as preliminary for 2024.

Then in January 2025 I do the accounts for the property for the year 2024, hopefully a small profit arises.

Revenue has at this stage allocated the 2k to 2023 and I pay preliminary for 2025, being 100% of liability for 2024 ??
 
Sorry I'm lost and I have limited time/energy to explain this.

Your payment for 2024 should be allocated to 2024, before you file for 2024. After filing, you either make a topup payment or get a balancing refund if you've overpaid.

Rinse and repeat for future years.

You should consider engaging a professional to assist unless and until you know what you're doing.
 
@T McGibney

Thanks for your replies and patience.

Westgolf.
 
Similar situation to you @Westgolf - but income source slightly different.
In 2023, I sold ETF units, making a profit. So that needs to be declared in the form 11 I submit in 2024 (by Nov 14, as mentioned above).
I will then need to pay the calculated tax due on this 2023 income.

Separately, by October 31, I need to pay the preliminary tax for 2024, even though I don't know exactly how much that will be until year end.

I can choose either:
  • to pay the same amount again as I paid for 2023's tax OR
  • to pay 90% of 2024's estimated/anticipated tax

Which option you choose depends on your circumstances. In my case, paying the same as last year doesn't make sense, as there was a lot of ETF profit, whereas this year it's mostly deposit interest with a small amount of ETF profit.
So makes sense for me to forecast out to year end and pay 90%.

And then in the form 11 I submit in 2025 (for the 2024 tax year) I will pay the balance, when I know the actual amounts.
 
Excellent reply Inisfree, many thanks.

The nub of my query is that , as outlined by yourself, you are caught twice in the one year. You pay the calculated tax on 2023 and then you pay preliminary for 2024. I would take the option of paying the same value again so therfore I pay twice in one year. Granted its for two different tax years.

My rental property was a loss maker for a number of years and the minute it turns the corner into profit Hello preliminary demand from Revenue.
 
Yeah, it's rough all right. I think it's the first year where you are hit hardest, because you didn't pay any preliminary tax the previous year, so you aren't just paying the balancing amount.

But over time, it would even out - so you're effectively paying the preliminary for the current year, adjusted up or down depending on the balancing amount for the previous year once your form 11 calc is done.
 
I mentioned this on a previous post and it may be of interest.

In the past I had PAYE plus rental income.
I also had a DC pension.

When tax for previous year was calculated (Form 11) for example 2k for rental income, I would make an AVC lump sum payment 5k into the pension within revenue limits. Attribute that to the previous tax year, only then submit Form 11 and therefore eliminate the income tax liability for the previous year (not usc or prsi though).

This in turn also left me with no preliminary tax liability.

Rinse and repeat each year. Worked well for me.
 
Westgolf said:
you are caught twice in the one year
Click to expand...
Not really IMO. You are obliged to file by November of the following year that you have a tax liability so you get 22 months of paying no tax. The reason it's so late is that by November of the year in question for preliminary tax, you have seen 10 months of trade/rent for that year and can make a pretty good stab at your liability.
 
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