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Mortgage interest restriction

  • 06-07-2010 5:06pm
    #1
    mozattack
    Registered Users, Registered Users 2 Posts: 1,908 ✭✭✭


    Hi all,

    Does the 75% mortgage interest restriction apply to foreign lets? I have looked at this and am still not sure:-

    (a) foreign lets are taxed under Case III and the restriction relates to case v lettings, however

    (b) Case III rents are to be calculated in accordance with Irish tax law.

    I am edging towards the later, i.e. 75% restriction does apply?


Comments

  • #2
    derand
    Registered Users Posts: 26 ✭derand


    This is an interesting technical question.

    The short answer is yes.

    Foreign rent is assessable under case iii being income from a foreign possession. The strict technical position is that case iii sources are taxed on the full amount of income arising - i.e. gross income without deduction for expenses incurred.

    There is a long standing Revenue concession for bona fide commercial transactions whereby Revenue will allow a deduction for expenses in line with those that would apply to an equivalent Irish income stream. It is because of this that a deduction is allowed in your case . I assume the properties are rented residential otherwise 75% restriction does not apply.

    derand


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