Rental income questions

Many thanks to Bronte and other supportive posters! Basically I'm letting a property and I'm paying an accountant - who appears to do the work on behalf of Revenue and any tax-saving information is very difficult to obtain.

Apologies but I'm not able to use the quotation function Bronte so I'll underline...

8. An overall rental loss will incur 4% PRSI + USC charge (if mortgage interest, expenses and capital allowances exceed rental income),
Just wondered if USC + PRSI was charged on rental income if no capital allowances deductions.

9. Rental allowance is paid to occupier regardless if not used to pay for rental property occupied.
Just referring to rent allowance is paid to the tenant rather than directly to the landlord

18. When making a tax return, savings are liable for dirt tax + USC.
Assuming that a landlord happens to have a savings account for childrens education in a few years. The govt won't subsidise 3rd level education for anyone who may have been responsibly saving. Maybe Post Office accounts are exempt from DIRT & USC.

19. If lump sums have been paid against the mortgage, then mortgage protection policy payments can be reduced.
You mean you'd need less insurance and then you'd have to change your policy. Not a good idea.
Not sure why you think it's a bad idea. Surely it is a money-saving exercise - provided the mortgage holder has savings that would cover the outstanding mortgage owed.

20. There is absolutely no government incentive to let a property or to save for the future.

Give us the figures and you'll see if it makes sense.
This could be an endless rant so I'd prefer not to derail the intent of the original post.

Thanks again.
 
Eddie Peters said:
Give us the figures and you'll see if it makes sense.
This could be an endless rant so I'd prefer not to derail the intent of the original post.

Thanks again.
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You're gas on the rant. It's precisely what is needed. Actual figures !

I'd also be worried about your relationship with your accountant. Perhaps you should switch. And I'd like to point out that other posters if you check have contributed greately to the knowledge on here of rental income. All you've to do is go back and check. Tommy McGibney in particular. You seem to think your accountant is hiding something from you. There is no holy grail of tax savings out there or we'd all be onto it. I'd say your accountant is working on your behalf to make sure that revenue are happy and that you don't sue his ass for getting your tax returns wrong.

I'm not an accountant so for the revnue stuff I don't really keep up any more. I've too many years of changing rules in my head, which is why I've hired a good accountant in any case. The PRSI followed by the USC was the straw that broke the camels back for me.

9. Rent allowance is generally paid directly to the tenant. They then have to pay you their rent, out of that and their top up. NEVER ever agree to falsify the forms for social welfare. And you'll have tenants begging you and at all sorts. It's a rocky road to go down. You have to fill out a form for them, I advise you to be very familiar with how this works. I've never had an issue. (fingers crossed)

18 - what has this to do with rental income?

19 give us a concrete example. Are we talking you making mega lump sum payments (here we go back to my asking for the figures)

20. That's a debate. Maybe another thread.

Me, I'm getting out at the next bubble. The only thing that consoles me is that I didn't sell one property at the height, make a killing and then go and borrow over my head. AAM keeps me sane in relation to that. The horror stories. Including my own solicitor. And another solicitor who is a friend. Then there's two members of my family who are still up to their necks all these years later.
 
I honestly don't think that my accountant is hiding anything but appears to play it really safe - which is good from a tax compliancy point but sometimes I think that it's needlessly costing me e.g. nppr/ septic tank tax were not allowable rental expenses. I did try to switch to another accountancy firm a few years ago but the new firm advised that it wasn't possible as my accountant had all my records.

By the way I do appreciate the invaluable contributions of yourself, T McGibney et al.

Thanks again Bronte - I'm really impressed by your quick, logical replies & keyboard skills!
 
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Your accountant sounds excellent. What do you mean play it safe, that's why we hire accountants isn't it, to play it safe. We don't want to be paying roulette with revenue. You've heard the expression 'dull' accountant. (apologies guys - I don't want no fly by night- my accountant reigns me in ! And he's by no means dull, far from it, just in case he's reading).

My own accountant and I had a debate about NPPR, I am properly informed and I alone took the decision to claim it. It is on my head. I doubt any of the rest of his clients claimed it. But I'm prepared for an audit and to go to appeal on this.

Septic tank? Is this is a cleaning charge I would think it was allowable. Or was this a 'capital' expense and so will go against CGT, eventually.

That's nonsense that you can't change accountant, you are entitled too your records (and in any case do you not have a copy of everything yourself ! returns, emails, receipts etc). Sounds more like the new accoutants weren't interested in your business.

Thanks for the praise, but you shouldn't trust stuff you read on the web.
 
I agree Bronte. I could do the accounts online myself but I pay an accountant to act as an independent non-biased auditor.
The septic tank tax was a govt registration charge (around the same time as nppr).
Totally agree that the accountancy firm wasn't interested in new small business (during the boom time).

18. When making a tax return, savings are liable for dirt tax + USC.
what has this to do with rental income?
Only related to rental income because tax kicks in when income exceeds the €3174 allowance.

6. 75% of mortgage interest is deducted from the gross rental income if registered with the PRTB - costing €90 if registered within the month of tenancy; or €180 retrospectively after one month. How is a retrospective application made e.g. if tenants have moved on, are PPS numbers and signatures still required.
Anyone know how this can be done retrospectively without PPS numbers?

19. If lump sums have been paid against the mortgage, then mortgage protection policy payments can be reduced.
Assuming that mortgage amount has been significantly reduced by paying periodic lump sums. I assume that mtg protection payments can be reviewed.

Thanks.

 
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Ask revenue by email about the service tank charge. Not on the phone though. They take a few months to get back to you, in my experience but they will get back to you eventually. I've a feeling your accountant is right that it is not deductable. Alternatively google it. Might be on revenue .ie website too.

Ok 18 I get now.

So your real issue today is you didn't register some past tenants with the PRTB. I'm just curious, does your accountant not ask you to confirm you are PRTB registered, mine does and I've to prove it too !

I don't know exactly how you go about back registering currently, but there is a thread on it here somewhere as it's been discussed. Not sure if it gives exact details. So I've some suggestions. a) start a thread on just this. b) try the IPOA c) try the landlords.ie website d) ring PRTB e) log in to PRTB and see how far you can progress without the PRSI.

19 I don't like people tinkering with insurances when there is no need. In general, let's say you started the insurance 10 years ago, the premium would now be relatively not so bad, but if you start a new policy, you might find the premium is higher even though the amount underlying it is less. This is because as we get older insurance goes up. So I don't see this as a big cost saving.

You seem loath to post figures so it's hard to figure out what is going on exactly.
 
The septic tank charge is clearly an expense of management of the property and is of course deductible on that basis. The same applies imho to the NPPR and LPT although Revenue and Ministers Noonan and Lenihan have pretended otherwise. Why should they say anything different? Their job is to maximise the tax take.

Its easy and relatively straightforward to retrospectively register tenants with the PRTB.

Bronte, out of interest, how do you prove to your accountant that you have complied in full with the Residential Tenancies Act re PRTB? It's easy to demonstrate that you've registered but all but impossible, short of sworn declarations etc, to prove full compliance with the Act, as is required for the interest charge deduction.
 
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Thanks again for your timely & informative reply Bronte.
To be bluntly honest, I only posted yesterday because I was doing tax returns and it seemed like a good idea to help others! I didn't post numbers because I was not looking for advice - just looking for some balanced general views.
Just wondering though why you're not interested in mtg protection policy reviews though? It might be a tax-deductible expense, but it is an expense.
Thanks T McGibney - "Its easy and relatively straightforward to retrospectively register tenants with the PRTB". Are PPS numbers not required?
 
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T McGibney said:
Bronte, out of interest, how do you prove to your accountant that you have complied in full with the Residential Tenancies Act re PRTB? It's easy to demonstrate that you've registered but all but impossible, short of sworn declarations etc, to prove full compliance with the Act, as is required for the interest charge deduction.
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Goodness me no. How do you mean comply. I send him a scan of all the registrations. Isn't that enough. It well night time of year to have a look again as I might have a tenancy to re register. Also sent proof of the NPPR. The house hold charge. Can't remember about LPT, I think he can see that online, as I seem to recall that from last year. Also discussed with him this year as I never got the reminder and I was worried that being late would mean some kind of surcharge, but as the accounts aren't submitted I'm not late.

Can't understand how they made LPT so complicated when NPPR was so easy. Both to register and pay.

Edit: You're making me worried now. What exactly else should I comply with for the Act? (as an aside, and I'm not the only family member in this business. None us us has ever ever been visited by any authority to see if we comply with anything. Not buildings, not safety, nothing. But I get the gas serviced and a certificate etc. Central heating cleaned.
 
Eddie Peters said:
Th
Just wondering though why you're not interested in mtg protection policy reviews though? It might be a tax-deductible expense, but it is an expense.
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I'm at the end of the road Eddie, too old to go changing anything now. Last property doesn't even have insurance and is in NE !

You should have told us your reason for posting at the beginning. It's on my to do list. I hate this part.
 
T McGibney said:
The septic tank charge is clearly an expense of management of the property and is of course deductible on that basis. The same applies imho to the NPPR and LPT although Revenue and Ministers Noonan and Lenihan have pretended otherwise. .
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On this matter, did we not have arguments back and forth on here on this. Or was that the guy M, what was his name. Mandelbot ? I told him I was willing to go all the way on this and via the IPOA I contracted another helpful accountant in Dublin who told me it was his opinion to claim it and that was his advice to this clients too. They haven't a leg to stand over on this. It's most definately an expense of management of the property.
 
Insurance is due tomorrow on rental. €338 yoyos. I will definitely pay it though. For public liability insurance if nothing else.
T McGibney - "Its easy and relatively straightforward to retrospectively register tenants with the PRTB". Are PPS numbers not required?
My accountant reckons that LPT is not a deductible expense. I pay for the advice and follow it.
 
You're confusing your insurances. I won't tell you as a non resident what my premiums are for house insurance. That's another thing I had to go to the ombudsman about as a bank decided to cancel it on me one year when they 'discovered' I didn't live in Ireland !
 
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Eddie Peters said:
T McGibney - "Its easy and relatively straightforward to retrospectively register tenants with the PRTB". Are PPS numbers not required?
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No, not any longer. Its been quite a while since they stopped looking for them. Some tenants, quite justifiably, were reluctant to give their PPSNs to landlords in order to be put on a State register.
 
Apologies Bronte. I pay landlord insurance on the property that covers buildings, contents, public liability, replacement locks, fire brigade cover, subsidence etc. Never claimed a bob but it helps me sleep:)
 
Bronte said:
Goodness me no. How do you mean comply. I send him a scan of all the registrations. Isn't that enough. It well night time of year to have a look again as I might have a tenancy to re register. Also sent proof of the NPPR. The house hold charge. Can't remember about LPT, I think he can see that online, as I seem to recall that from last year. Also discussed with him this year as I never got the reminder and I was worried that being late would mean some kind of surcharge, but as the accounts aren't submitted I'm not late.

Can't understand how they made LPT so complicated when NPPR was so easy. Both to register and pay.

Edit: You're making me worried now. What exactly else should I comply with for the Act? (as an aside, and I'm not the only family member in this business. None us us has ever ever been visited by any authority to see if we comply with anything. Not buildings, not safety, nothing. But I get the gas serviced and a certificate etc. Central heating cleaned.
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Not meaning to scare you at all, but he's wasting his and your time looking for copies of your registrations as they indicate but don't actually prove compliance. For example you could have 2 tenancies in a year but registered only one, and that wouldn't mean you'd be entitled to the deduction as you wouldn't have complied with your registration obligations under the Act - even though you would have a piece of paper that suggests otherwise.

Just shows how silly it was of Brian Cowen as finance minister to link PRTB registration with interest deduction.
 
For those considering renting out a property I think we might be going off-track from the original post.
No offence to T McGibney or other accountants. I honestly think that most accountants are decent independent auditors.
 
T McGibney said:
Not meaning to scare you at all, but he's wasting his and your time looking for copies of your registrations as they indicate but don't actually prove compliance. For example you could have 2 tenancies in a year but registered only one, and that wouldn't mean you'd be entitled to the deduction as you wouldn't have complied with your registration obligations under the Act - even though you would have a piece of paper that suggests otherwise.
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Phew. I know very well that all tenancies in a property have to be registered. At all times (not in voids of course) And so does my accountant. (I have subdivided property)

I know someone who played fast and loose on that too. Registering say 4 instead of 6. Told them they were idiots and it would catch up with them.

What Tommy do you do with your clients about 'compliance'. It's not really the accountants job but I think it's important they advice their clients on it. Same with NPPR, LPT etc. You'll all be blamed if we 'forget' !
 
Eddie Peters said:
For those considering renting out a property I think we might be going off-track from the original post.
No offence to T McGibney or other accountants. I honestly think that most accountants are decent independent auditors.
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We may have slightly veered but I'm learning stuff. Tommy has just pointed out something very important about the PRTB that others might not know. A) all flats within one building has to be registered, not just one tenancy B) PRTB can be backdated C) no longer any need for PRSI no - I didn't know that, but I prefer to have it, never know the day it might help me to prove they were real !

To be honest I might as well now just register with Tom, Dick and Harry as whose to know if they are real or not.
 
It's important to advise on compliance but I would never go so far as to demand certs etc off people because it's their job to comply and I won't leave myself open by confirming third-party compliance when I can't prove it.

Incidentally your friend's playing games with PRTB reg's won't catch up with them except by accident. Whatever about the accountant, it's largely impossible for a tax inspector to detect something like that.
 
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