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Tax on rental income if living abroad

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    #32
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,381 CMod ✭✭✭✭Pawwed Rig


    SweetPotatoes wrote: »
    So basically she can just move on and I am the one the revenue could go after. If I had any issues with the flat when leaving it she could use that against me instead of vice versa?

    Luckily for me there were no issues and she was a very good landlord. But I could have been unlucky?

    Technically it is still your liability and is accruing interest and penalties on a daily basis if it has not been paid. Having said that Revenue would be unlikely to chase you for it.


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    #33
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    SweetPotatoes wrote: »
    So basically she can just move on and I am the one the revenue could go after. If I had any issues with the flat when leaving it she could use that against me instead of vice versa?

    Luckily for me there were no issues and she was a very good landlord. But I could have been unlucky?

    To be honest I have no idea how it actually works, or how likely it is that revenue would actually go after you.


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    #34
    Grandpa Hassan
    Registered Users Posts: 1,945 ✭✭✭Grandpa Hassan


    IMHO it won't happen. Tenants wont get hit for backdated tax. Previous posters have said that the ombudsman is not supportive of the current set up


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    #35
    SweetPotatoes
    Closed Accounts Posts: 62 ✭✭SweetPotatoes


    Grandpa Hassan wrote: »
    IMHO it won't happen. Tenants wont get hit for backdated tax. Previous posters have said that the ombudsman is not supportive of the current set up

    Just wondering what happens if the 20% is withheld by the tenant and this is not enough to cover the LL's liability or is too much what happens then? It seems a very stupid setup really.


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    #36
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    20% is the figure that has been set by revenue, so provided that is has been withheld every month of the tenancy then it will be sufficient to cover the liability.


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    #37
    SweetPotatoes
    Closed Accounts Posts: 62 ✭✭SweetPotatoes


    djimi wrote: »
    20% is the figure that has been set by revenue, so provided that is has been withheld every month of the tenancy then it will be sufficient to cover the liability.

    I am pretty sure my LL was declaring her rental income as she asked me for any receipts for repairs done during my tenancy which she allowed me to deduct from the rent. How can a tenant know to keep the 20% and when not? It is not necessarily so that the LL is not making declarations too.


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    #38
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,381 CMod ✭✭✭✭Pawwed Rig


    SweetPotatoes wrote: »
    How can a tenant know to keep the 20% and when not? It is not necessarily so that the LL is not makind declarations too.

    Where the landlord is non resident with no Irish agent the tenant is always legally obliged to withhold 20%.
    That is what the legislation says.
    Where the landlord pays this themselves doesn't remove the tenants obligations.
    But as already stated Revenue are not overly eager in enforcing that particular section.

    What ombudsman are people referring to here????


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    #39
    Mrs OBumble
    Registered Users Posts: 25,959 ✭✭✭✭Mrs OBumble


    Pawwed Rig wrote: »
    I have yet to hear of a tenant being forced to cough up this cash*.

    It happens regularly, via adjustment of the tenant's tax credits and SRCOP.

    Or at least it did a couple of years ago, not sure if it's still being done now.


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    #40
    EbanEmael
    Site Banned Posts: 13 ✭EbanEmael


    Pawwed Rig wrote: »
    Where the landlord is non resident with no Irish agent the tenant is always legally obliged to withhold 20%.
    That is what the legislation says.
    Where the landlord pays this themselves doesn't remove the tenants obligations.
    But as already stated Revenue are not overly eager in enforcing that particular section.

    What ombudsman are people referring to here????

    http://www.ombudsman.gov.ie/en/Publications/Annual-Reports/2009-Annual-Report/AnnualReport2009/chapter6.html#s2


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    #41
    RATM
    Closed Accounts Posts: 3,591 ✭✭✭RATM


    Mrs OBumble wrote: »
    You would not be tax-resident in Ireland.

    But if you are continuing to operate a business here (eg a rental property) you may have certain tax obligations.

    Time to see an accountant, methinks.

    That is not correct- the OP will be a tax resident in Ireland for the next three years. 183 days has already passed in 2013 so even if the OP left in the morning they'd still be considered ordinarily resident in Ireland for the remainder of the year. They would also be considered a tax resident until the 2017 tax year as it takes three years to lose your Irish tax residency. Thereafter they could assume tax residency of the country they are in. Their domicile will always remain Irish.

    From Revenue's site
    "An individual who has been resident in Ireland for three consecutive tax years becomes ordinarily resident in Ireland from the beginning of the fourth tax year. An individual who has been ordinarily resident in Ireland ceases to be so at the end of the third consecutive year in which he/she is not resident"
    http://www.revenue.ie/en/tax/it/who-pays.html


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    #42
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,381 CMod ✭✭✭✭Pawwed Rig


    RATM wrote: »
    That is not correct- the OP will be a tax resident in Ireland for the next three years. 183 days has already passed in 2013 so even if the OP left in the morning they'd still be considered ordinarily resident in Ireland for the remainder of the year. They would also be considered a tax resident until the 2017 tax year as it takes three years to lose your Irish tax residency. Thereafter they could assume tax residency of the country they are in. Their domicile will always remain Irish.
    You are mixing up the terminology here. Resident and Ordinary Resident are not the same thing.
    The 183 day rule is correct but it means the OP would be resident for the rest of the year and ordinarily resident in the following year unless they broke the 280 day rule for the 2 years which means they may be resident next year too.
    They would then be ordinarily resident but non resident for the following three years before being non resident and non ordinarily resident.
    There are elections that may be made regarding residence where a person can elect to be non resident, or avail of split year residency. Not gonna go into here in too much detail but this is the main reason the OP needs to avail of the services of a tax professional.


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    #43
    SweetPotatoes
    Closed Accounts Posts: 62 ✭✭SweetPotatoes


    How does a non-resident landlord ensure the tenant is paying the witheld portion of the rent to the revenue? I can see tenants keeping the money and the landlord needing to pay it anyway when submitting returns.


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    #44
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    SweetPotatoes wrote: »
    How does a non-resident landlord ensure the tenant is paying the witheld portion of the rent to the revenue? I can see tenants keeping the money and the landlord needing to pay it anyway when submitting returns.

    My very loose understanding of this system is that the tenant is the one responsible for the tax being paid, not the landlord, and as such if it is not paid then it is the tenant that revenue will be chasing. But being honest that might not be correct!


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    #45
    SweetPotatoes
    Closed Accounts Posts: 62 ✭✭SweetPotatoes


    djimi wrote: »
    My very loose understanding of this system is that the tenant is the one responsible for the tax being paid, not the landlord, and as such if it is not paid then it is the tenant that revenue will be chasing. But being honest that might not be correct!

    It seems strange to me. What can very easily happen is

    1. Tenant witholds a portion of the rent.

    2. Tenant eventually moves out and moves away from Ireland. This is very possible considering the amount of foreign students and people who come to Ireland to work on a temp basis.

    3. Revenue chases landlord for rent as the landlord is easier to place a lein against for money.


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    #46
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    I guess they figure that the landlord is abroad whereas the tenant is in Ireland, and while there is the chance that the tenant might leave the country, its less likely and they have a better chance of chasing them than they have of chasing someone who they know is not in Ireland and might not be returning for the foreseeable future.


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    #47
    Aemtler
    Registered Users Posts: 36 ✭Aemtler


    Pawwed Rig wrote: »
    If you are receiving 800 then
    Gross rent = 9600
    minus
    insurance
    maintenance costs
    PRTB reg fee
    75% of mortgage interest paid
    1/8th of the cost of the furnishings in the property.

    equals net rent of €x @20%.

    It is easier for your tenant if you have a family member/friend/agent here to collect rent.

    Further to this, does anyone know whether the non tax resident landlord is liable to PRSI/USC on the net rental income or just the 20% tax assuming it doesn't exceed the standard rate threshold.


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    #48
    marathonic
    Registered Users Posts: 1,668 ✭✭✭marathonic


    Aemtler wrote: »
    Further to this, does anyone know whether the non tax resident landlord is liable to PRSI/USC on the net rental income or just the 20% tax assuming it doesn't exceed the standard rate threshold.

    Have a look at this post.


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    #49
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    djimi wrote: »
    I guess they figure that the landlord is abroad whereas the tenant is in Ireland, and while there is the chance that the tenant might leave the country, its less likely and they have a better chance of chasing them than they have of chasing someone who they know is not in Ireland and might not be returning for the foreseeable future.
    A ridiculous position for Revenue to take. The UK has the same rule and even the form is called a R185 there as well but they have an opt out for tax compliant landlords who don't wish for their tenants to be saddled with this nonsense.

    The landlord may be abroad but his property can be seized if found guilty of tax evasion. At the end of the day anyone who evades any tax can skip the country once it becomes obvious they are facing charges,


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    #50
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    Aemtler wrote: »
    Further to this, does anyone know whether the non tax resident landlord is liable to PRSI/USC on the net rental income or just the 20% tax assuming it doesn't exceed the standard rate threshold.
    Non-resident landlords have no PRSI liability on their rental income. USC is levied at same rates as for Irish residents on the net profit, just as income tax is.


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    #51
    bigbadcon
    Registered Users Posts: 507 ✭✭✭bigbadcon


    I'm a non resident landlord and just about to do our first tax return with the help of an accountant. When we left Ireland I toldtthe tenants about them being liable for withholding the tax (in writing) so they pay 80% of the amount on the lease and are aware that when I do my tax return that we'll be giving their pps number to the revenue to come look for the tax.simples. in fact they can earn some interest on it assuming they haven't spent it all :-)


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    #52
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    bigbadcon wrote: »
    I'm a non resident landlord and just about to do our first tax return with the help of an accountant. When we left Ireland I toldtthe tenants about them being liable for withholding the tax (in writing) so they pay 80% of the amount on the lease and are aware that when I do my tax return that we'll be giving their pps number to the revenue to come look for the tax.simples. in fact they can earn some interest on it assuming they haven't spent it all :-)
    You should now request (if you haven't already done so) a completed R185 for 2013 form from your tenants.


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