Q.  I’m just about to move into rented accommodation and my landlord lives abroad. I’ve been told that I have to pay part of the rent to Revenue and that I am liable if I don’t do this. Is this correct and how do I do this?

11.04.11

It is correct. If your landlord lives outside Ireland and you pay rent directly to them or to their bank account located in Ireland or abroad, you must deduct tax at the standard rate (20%) from the gross amount that you pay. This deduction is tax payable by you to Revenue from your landlord’s income. You pay your landlord the remaining 80%.

If you pay tax under PAYE, you can account for it by reducing your tax credits and Standard Rate Cut-Off Point. You can notify your local Revenue Office and ask them to arrange this. Alternatively, you can make a tax return (Form 12) and pay the retained amount to Revenue. If you pay tax under self-assessment, you should include the details of your rent on your annual return (Form 11). A notice of assessment will then issue to you, showing the reduced credit.

If you fail to deduct tax from rent you pay to a landlord living outside Ireland, you (and not the landlord) will be liable for the amount. At the end of the year, you must give a completed Form R185 to the landlord to show that the tax has been accounted for to Revenue. The landlord can then claim this amount as credit on their annual Tax Return.

Citizens Information: Buncrana 074 9363496; Carndonagh 074 9373741

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