Living in NI - rental income ROI

I am currently living and working in NI but getting rental income on a property in ROI.

What are my tax implications here?
Where do I pay my tax?
At what rate?

Two ways of looking at your current situation which you should outline.

Have you a collection agent here in the Republic or does your tenant pay you the rent into your account?

If you have a collection agent they are liable to make a return of Income by 31 October of year of assessment on your behalf. If it is the case that you owe tax, this is due by you.

You will pay tax on the net income over allowable rental expenses incurred (eg mortgage interest, repairs, accountancy fees), and this is liable at 20%.You will get an amount of Irish tax credit as is allowable to your standing here in Ireland. you will be entitled to the single tax credit.

If you do not have a collection agent, and you receive the monthly rental income into your account, then by right the tenant should be deducting 20% of the rent and handing it over to Revenue on your behalf. you are still liable to make an Income Tax return here in the Republic and pay the tax owing after computing the annual amount.

Any tax payable here will be allowed as a credit against your UK tax payable so that you are not Doubly Taxed under the Irish/UK Tax Treaty.

gongey - thanks for that

i don't have a collection point as i get the money paid directly into my bank account, so therefore I must make the return by end Oct

so in effect you are saying, that if i am paying tax at the higher rate of 40% in NI, then I am basically paying rental income tax on ROI income at 40% which is split 20% each between ROI and NI?

another query re property - as a NI resident, would I be entitled to purchase a section 23/50 property in ROI and use the same allowances that are available to a ROI resident on my ROI rental income?

not sure what you mean by splitting.

you have rental income in Ireland which is subject to Irish tax. So if your net rental income is 5000, then you pay Irish tax of 1000.

When you go to submit your UK return you must include your Irish rental Income. This added to your other income is subject to UK tax and may well indeed mean you are taxed at your marginal rate in the uk. However whatever you work out your UK tax to be, you can claim the tax paid over here against it.

as for s23/50 properties and allowances in Ireland, yes the capital allowances are allowed if you have bought one, but only against Irish rental income. thus in the example above it may well reduce your Irish tax, but remember the income from the s23 property must also be added to your other UK income and taxed accordingly. the allowances will not be allowed twice.

also, tax is due in the year following the year of assessment. if you let the property in 2004, the return must go in by 31 October 2005.

slightly confused re section 23/50 properties comment

say for example, I have two rental properties in ROI, the first being a normal rental property (property A) one being a section 23 property (property B) with Eur50,000 allowances

Property A has rental income of Eur5,000 and property B income of Eur2,000. For ROI tax purposes, my rental income tax liability would be nil as the Eur7,000 rental income is set off against the allowances. However, on the NI income assessment, I would have to pay income tax on the Eur7,000 assuming that I am a marginal tax payer (40% rate).

Therefore for NI tax assessment purposes is my liability Eur1,400 (Eur7,000 * 20%) or Eur2,800 (7,200 * 40%)??

sorry for not making myself clear. your section relief would nullify any assessable income in Irelnad thus there would be no liability. On that basis there wouldn't be a liability in the UK either.