stamp duty clawback scenario...

[wayward]

Hello,

I moved into a new property in May 2007 as an owner occupier and did not pay stamp as it was under thee 125SqM rule and i was to be owner occupier.. In September 2007 I moved abroad for work purposes and have rented two of the three rooms to help with the mortgage payments since then.I have kept one room for myself as i needed a base for when i was back in ireland..The second reason was to try and keep it as my PPR(see description of what is PPR from revenue website below)

I didnt take professional advice but It is my contention from reading the revenue website that you can move abroad and still keep your PPR status on your property in ireland. Therefore i assumed that i could rent the two rooms under the rent a room scheme and not be liable for stamp duty claw back even if i earn over 10k in rent in one year.. However, if i am liable, i would like to pay asap as to avoid further penalties etc..as this would have been due to have been paid in November 2007.

The revenue website states the following in relation to clawback:

"There is no clawback of the first time buyer or owner occupier reliefs where rent is received by the person in occupation of the house or apartment for the letting of furnished accommodation in part of the house or apartment. Provided that the purchaser continues to occupy the house as his or her PPR for the relevant period, a clawback of stamp duty will not arise even where the rent received is in excess of the annual threshold which applies for income tax purposes. This threshold has been increased from €7,620 to €10,000 for the tax year 2008"

and it states the following in relation to PPR:

"An individual’s principal private residence at any time is the building or part of a building occupied by the individual as his or her only or main residence: during the period of 12 months ending with that time, or where the building was more recently acquired, from the time of acquisition to that time. An individual is treated as occupying a building as his or her only or main residence even where the terms of a persons employment require that he or she absent themselves from the building so long as both before and after any such period of absence the individual actually occupies the building as his or her only or main residence"


My job requires me to currently live out of ireland and I will be abroad until May 2009. Therefore does this mean i can still claim to occupy my property as my only residence(PPR) and therefore make me not liable for clawback.

Any info/comments/suggestions much appreciated.

 

[Howitzer]

"An individual’s principal private residence at any time is the building or part of a building occupied by the individual as his or her only or main residence: during the period of 12 months ending with that time, or where the building was more recently acquired, from the time of acquisition to that time. An individual is treated as occupying a building as his or her only or main residence even where the terms of a persons employment require that he or she absent themselves from the building so long as both before and after any such period of absence the individual actually occupies the building as his or her only or main residence"


My job requires me to currently live out of ireland and I will be abroad until May 2009. Therefore does this mean i can still claim to occupy my property as my only residence(PPR) and therefore make me not liable for clawback.

Any info/comments/suggestions much appreciated.

My undertsanding is that your situation does not fullfill the criteria you have quoted. Does Revenue see you as being ordinarily resident in Ireland? (It might if you work for an Irish company and you have been seconded abroad) From the details you have provided your situation is analogous to someone going to Oz for a year and claiming their tax back as they won't be ordinarily resident in the country during that period.

If you're not considered to be ordinarily resident then it's not your PPR.

 

[wayward]

How confident of this are you Howitzer? I suppose I should get Professional advice on this, However, Its hard when your overseas as Tax Laws here are different etc..
I have to rely on the revenue website or try and get someone at home to approach an accountant on my behalf. Any suggestions on a firm who would specialise in this area in Ireland?

Thanks in advance

 

[gongey]

Ordinary residence doesn't come into this. ( moved Sept 2007, returning May 2009, takes three tax years to be considered non-ordinarily resident). As long a you come back to live in the same property for a continuos period after moving home, then it is your PPR. If you sell it, you would be entitled to claim PPR relief pro-rata (ie total months you owned it divided by period of actual occupation plus 12 months)

On the basis that Revenue would continue to treat it as your PPR for CGT reasons, in my opinion it falls that the current treatment will remain the same for income tax purposes, once your income from letting is not in excess of the prescibed limit.

 

[Howitzer]

I think it comes down to whether your current job has enforced a temporary foreign secondment upon you (grand) or whether you've just decided to live in the South of France for a couple of years picking grapes for the crack. "I think" if the move abroad is your choice then you lose the PPR status, if it's imposed upon you then you retain it. Moving abroad out of economic necessity doesn't appear to come into it.

[broken link removed]

WHAT AT ANY TIME IS AN INDIVIDUAL’S PRINCIPAL PRIVATE RESIDENCE?
An individual’s principal private residence at any time is the building or part of a building occupied by the individual as his or her only or main residence: during the period of 12 months ending with that time, or where the building was more recently acquired, from the time of acquisition to that time.
An individual is treated as occupying a building as his or her only or main residence even where the terms of a persons employment require that he or she absent themselves from the building so long as both before and after any such period of absence the individual actually occupies the building as his or her only or main residence.