Taxation / Property Interest Relief

[DenisOL]

Hi, I have been abroad for the past 6 months having been asked by my employer to consider a 12 month placement in Australia for the same company/partnership. Jumping at the chance, I was not forced to go, but additional hints such as “It would be good for your career etc” helped an easy decision.

Just over 2 years ago, a friend and I climbed onto the property ladder and bought a simple 2-bed apt just outside Dublin. My friend is still living in the apt with his girlfriend and we decided not to rent my room. I was aware of stamp duty claw back etc also so didn’t want to go down the rental route either. I have been taking care of my share of the mortgage from OZ and can show bank statements etc to back this up.

Anyhow, I returned for a quick break last week to find a letter sent to me a few months back from the Revenue Commissioners (after I applied for tax back on P45/Irish income) asking me:
- How I was planning on paying my mortgage etc,
- and if I was renting.

Where it gets complicated is my co-owner has been supplementing his share with a voluntary contribution from his partner (much less than the €7000 or whatever the “rent-a-room” scheme allows) but hasn’t declared any of this.
My questions are:
- Should we have declared this small income/is it mandatory?
- Do I need to forward my bank statements for the last 6 months to the RC?
- Will he be required to submit anything similar?
- Anything else I will need to provide the RC with?
- Will any of this damage the interest relief we are currently receiving?

I know I don’t have much to worry about, but I want to deal with this asap while still in the country this week.
Many thanks in advance of any posts…

D.

 

[webtax]

a couple of points:
- you are right that you have nothing to worry about as you are not renting out your room. you should give the revenue a call and answer the questions they have asked and they will let you know what proof they require.
- it won't affect the interest relief you are receiving as the house will still be considered your PPR
- your friends situation is a matter for him and the revenue so you should leave it to them (if he declares the income under rent a room they should have no problems, plus his partner could claim rent relief)
- are you paying irish tax on your income in australia and did you check your tax situation with your employer?
- did you get any relocation expenses from your employer?

 

[DenisOL]

Thanks for the reply, I will give them a shout tomorrow (Friday)...
To answer your questions:
- No, I am paying Aus tax. I took a P45 as part of a "leave of absence" from the Irish office to join the Australian Group for a set 12 month period. All my income here in Australia is subject to Australian taxes etc.

- The Australian Group paid for my flights and expenses for relocating and they'll pay them again on my return. They also sorted out temporary accommodation over here until they found me a suitable place to live for the year.