Let to sister. PRTB registration required,

uberwolf

I'm coming towards doing my tax return for last year. The property was occupied by my sister and sub let to two pals, each of whom paid separately by etf.

They've since left and the property is let to 3rd parties and the tenancy is registered.

At the time, out of laziness, i took the self serving view that a sister was a sufficiently closer relation as allow for exemption from registration. Now that the tax return is due my bullishness has dimmed a little and I'm wondering should i proceed with a late registration? Thoughts?

seamus

Yeah, it looks like the family exemption only applies to spouses, parents and children, not siblings.

Whether you should is up to you. Basically if the PRTB find out you didn't register it, you'll be a sent a notice. Comply with the notice and that's the end of it.

Either way it'll cost you €180 to file a late registration, so you gain nothing by voluntarily registering. As the tenancy has ended, you're not going to need the PRTB dispute process or anything like that.

Arbiter of Good Taste

seamus wrote: »

Either way it'll cost you €180 to file a late registration, so you gain nothing by voluntarily registering.

So I take it, then, that the OP is not intending to claim a deduction against the rent for mortgage interest in his tax return...

myshirt

seamus wrote: »

Basically if the PRTB find out you didn't register it, you'll be a sent a notice. Comply with the notice and that's the end of it.

That is actually literally it. You could be unregistered for years, they knock on your door and you pay up. No incentive there to register is there...

seamus wrote: »

Either way it'll cost you €180 to file a late registration, so you gain nothing by voluntarily registering

I'm not entirely sure. There may be certain expenses not allowable in the tax return if unregistered, for example interest on any loan you have on the asset. That's a big one.

Marcusm

uberwolf wrote: »

I'm coming towards doing my tax return for last year. The property was occupied by my sister and sub let to two pals, each of whom paid separately by etf.

They've since left and the property is let to 3rd parties and the tenancy is registered.

At the time, out of laziness, i took the self serving view that a sister was a sufficiently closer relation as allow for exemption from registration. Now that the tax return is due my bullishness has dimmed a little and I'm wondering should i proceed with a late registration? Thoughts?

If this is an issue of the deductibility of interest I think you have missed the boat. Interest relief is only available to the extent that the PRTB registration requirements for the particular tenancy are met (s.11 FA 2006). It is a matter of interpretation, however, if the tenancy has ended, it is hard to see how you can meet the registration requirements. Late registration of a continuing tenancy is a registration; it is hard to see that you can register a tenancy which has already ended. There is no express prohibition on it but it is hard to see how it meets the requirements. You should get professional advice.

uberwolf

Marcusm wrote: »

If this is an issue of the deductibility of interest I think you have missed the boat.

this is entirely an issue of the deductibility of interest...

I have taken professional advice to proceed with the registration, but tbh I didn't really get the impression that that professional advice was the result of careful and considered assessment of the situation.

myshirt

uberwolf wrote: »

this is entirely an issue of the deductibility of interest...

I have taken professional advice to proceed with the registration, but tbh I didn't really get the impression that that professional advice was the result of careful and considered assessment of the situation.

Ouch.

It is an area of Revenue audit at this time aswell then, so really would find yourself in swift trouble if claimed it.

uberwolf

I think we're settled that I should (have) register(ed) the tenancy.

If the PRTB allows me register the tenancy (by act of processing my application) presumably I have fulfilled their requirements and hence the point that Marcusm raises. Additionally I have taken professional verbal advice, in response to a written query, guiding me to do so.

I'd like to think the combination of those two factors would indemnify me from penalty should Revenue find against me in the future? Or is that more of the self serving thinking which sees me in this position?

The_Conductor

Uberwolf- get proper professional advice.
No disrespect intended to any of the posters in this thread- however, it is imprudent to rely on advice from random strangers on the internet.........

seamus

Not all of us are strangers, but he knows that I'm neither a property or taxation expert

uberwolf

thanks all. Should I encounter an issue with Revenue I'm certainly aware that pointing to these posts would not represent a defense!

The quantum at issue isn't huge under 5k interest and so under 1.8k tax.

My original question here was more to do with the PRTB requirements rather than the subsequent revenue implications. I have taken professional advice. It doesn't sit 100% with me, but ultimately I'll return to that advice, maintain a written record of it and I will be able to say that I acted in good faith based on that advice.

Marcusm

uberwolf wrote: »

thanks all. Should I encounter an issue with Revenue I'm certainly aware that pointing to these posts would not represent a defense!

The quantum at issue isn't huge under 5k interest and so under 1.8k tax.

My original question here was more to do with the PRTB requirements rather than the subsequent revenue implications. I have taken professional advice. It doesn't sit 100% with me, but ultimately I'll return to that advice, maintain a written record of it and I will be able to say that I acted in good faith based on that advice.

If I recall correctly, the only mechanism to protect yourself against penalties is the disclose the position which is the subject of doubt; that being said, if the tenancy has ended, I'm not even sure if you have a filing position even if the "doubt" is disclosed. Get proper professional advice which you consider less flakey than that which you have already sourced.

myshirt

Ah, no harm bouncing it off a few boardsies here. We're all sensible enough here to know not to take online advice as professional advice, but we all have brains aswell, so no harm discussing a few ideas together and being armed with some information and knowledge to bring to the advisor.

The issue I find with tax advisors you see is that they can so heavily caveat their advices that the advices are near on useless. The classic 'I have prepared this letter based on the information you gave me'. Yes, fine. But mr tax advisor, I haven't a clue what my problem is, only at a surface level.

A good tax advisor will tease out the issue from your brain dump of information to him and probe you with the right questions. He will 'assess the situation'. He will then take the tools out of the toolbox and get to work. In the end they will communicate to you in clear, unequivocal and non superfluous language. Clear recommendations is what you want, not a rehashing of some legislation and a 'well you could do this, you could do that' uberwolf. There are so many appalling tax advisors out there it's insane, but there are some very high quality ones also. Very, very high quality.

Uberwolf - press your advisor for clear advices and don't let them risk transfer back to you as they are in fear of professional indemnity insurance premiums or unsure of themselves. He is the professional. You are the client. You are relying on him to guide you through this. Don't accept any risk transfer.

uberwolf

By way of update, i got unambiguous written advice that my approach was acceptable. I was told that revenue and prtb have been taking a more relaxed view of this in recent times.

In keeping with the in thread warnings everyone should take their own advice on this matter, but happy ending for me i think.

Vancity

I found this looking for something else but just as a note - when I let my property for the first time several years ago and did my first tax return, the Revenue wrote back to me (almost immediately) and asked for a copy of the interest certificate, a copy of my capital allowances computation and a copy of my PRTB registration confirmation stipulating that it should be dated from the date the tenancy began....

I had all of it done properly so it was all fine but the Revenue letter was very precise and they didn't process my tax return or issue my balancing statement until they got it all. So sometimes they do ask!

uberwolf

I got a fairly particular answer to the effect that yes, they used to be very tight on this, but maybe due to the numbers, the 'accidental' nature and to encourage people into the tax net rather than disincentivising people, they have relaxed the position. PRTB paid = deductible interest for the time being apparently.