Well, revenue have given you your answers from all the written information you have given them. Might have been a better idea to have come on here first, although i'm not saying you would have been given any tax evasion information, you may have been able to get ways of avoiding paying too much.
As an example, if furniture was needed or maybe a fridge/freezer, etc, I do believe you could claim the cost back at the rate of 12.5% per annum for 8 years. Hope you understand?
Thanks, but the intent of my post was not to get into the minutiae of a standard rental income tax computation. That is well covered elsewhere in these forums.
As an aside, to your point, if the item is a ‘replacement of a domestic item’ eg a fridge, as in your example, you don’t have to wait 8 years to claim the relief on the cost of the replacement, but rather you can write off the total cost of the replacement in the current year. Important clarification to your advice. But I digress from my original point.
Hope you understand?
Are you saying a fridge costing lets say 1000E as an example only last say four years and needs to be replaced with 500 Euro written off can you claim the balance of 500 Euro against rental IncomeIt must not be well enough covered, as the underlined is completely incorrect. You can claim a balancing allowance to claim any unused capital allowances (however many 1/8's remain unclaimed when the fridge dies).
The replacement fridge is its own asset and you claim capital allowances on it as normal.
It must not be well enough covered, as the underlined is completely incorrect. You can claim a balancing allowance to claim any unused capital allowances (however many 1/8's remain unclaimed when the fridge dies).
The replacement fridge is its own asset and you claim capital allowances on it as normal.
You must be unaware that this is established custom & practice for low value items in rental calculations. Revenue apply commonsense & those doing tax self assessments should do also - you don't have to re-capitalise a replacement microwave which cost E100 & depreciate it over 8 years, & the same applies to a fridge. This is not written anywhere but it is custom & practice. Do you think Revenue will ask you to redo your tax calcs if you explain that you have expensed a replacement fridge vs charging Eur40 per annum W&T ? They have bigger fish to fry.
However, if you want to capitalise a microwave, go ahead, they won't challenge that either.
If you charge uneconomic rent does the landlord have to pay income tax on the value of the "gift"?
I suspect orbiednam has the correct position if it got challanged,
Thanks, but the intent of my post was not to get into the minutiae of a standard rental income tax computation. That is well covered elsewhere in these forums.
As an aside, to your point, if the item is a ‘replacement of a domestic item’ eg a fridge, as in your example, you don’t have to wait 8 years to claim the relief on the cost of the replacement, but rather you can write off the total cost of the replacement in the current year. Important clarification to your advice. But I digress from my original point.
Hope you understand?
You're wrong. The fridge has to be depreciated over the 8 years. But if it dies in say year 2 you can write the entire cost off that tax year. That's my understanding of it. Not that I've ever bothered to do that. Where I do agree with you is that any item under 100€ I'm not depreciating as this is too tedious. Say a hoover for example. If I'm audited and the revenue guys really want to nit pick on this off with them redoing years of tax computations. And I don't supply microwaves.
1. On the reduced profit generated by the ‘uneconomic rent’ Revenue replied that
“In the Guide to Rental Income under the section What expenses are not allowed?....it states:-
You cannot deduct the following expenses when you are calculating your rental profit or loss:
" expenses on premises rented out on an uneconomic basis, where it is not possible to make a profit from the rent received”.
That’s all they wrote. From this I am taking that if you are still generating a profit (which you likely are, albeit reduced) this is ok, & the expenses are deductible. If you are generating a loss, you will be challenged & they will not be deductible.
You keep quoting custom and practice and commensense and materiality. As though that changes things. I think it's pretty clear revenue would ignore a 30 Euro Toaster but not a 300 Euro fridge.See subsequent explanations today above. According to the law you have to depreciate, but custom & practice, commonsense & materiality are applied. However up to the person signing the tax return as I have said.
You don't supply microwaves?
https://onestopshop.rtb.ie/beginning-a-tenancy/what-minimum-standards-must-a-property-meet/
You keep quoting custom and practice and commensense and materiality. As though that changes things. I think it's pretty clear revenue would ignore a 30 Euro Toaster but not a 300 Euro fridge.
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