Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

It is im­por­tant to claim all the tax re­liefs and cred­its you are en­ti­tled to when fil­ing your tax re­turn — and to write any tax-de­ductible ex­penses off your tax bill. How­ever, claim­ing re­liefs you are not en­ti­tled to could land you in trou­ble with Rev­enue.

One area in which you could eas­ily slip up here is the tax relief on med­i­cal ex­penses. Not all med­i­cal ex­penses are el­i­gi­ble for relief and it can be easy to get con­fused be­tween those that do and those that don’t.

“Tax relief is al­low­able on med­i­cal ex­penses, but rou­tine den­tal (such as fill­ings) and op­ti­cal ex­penses are not el­i­gi­ble for relief,” said O’neill. “Physio costs can be treated as med­i­cal ex­penses — if availed of on re­fer­ral from a GP.”

Sim­i­larly, land­lords are en­ti­tled to write cer­tain ex­penses off their tax bill for rental in­come, but they don’t al­ways get it right. Some land­lords mis­tak­enly be­lieve they can write the full cost of the mort­gage re­pay­ments on the rented prop­erty off their tax bill. This is not the case.

You can­not write the full cost of mort­gage re­pay­ments off your tax bill, and you can usu­ally only write-off 75pc of your mort­gage in­ter­est against rental in­come earned in 2016.

When fil­ing 2017 re­turns next year, land­lords will be able to write off 80pc of the in­ter­est.

Fur­ther­more, land­lords are only en­ti­tled to write off ex­penses that arose while the prop­erty was let, (though un­der Bud­get 2018, own­ers of va­cant prop­er­ties will be able to write off pre-let­ting ex­penses in cer­tain cir­cum­stances).

“When writ­ing ex­penses off your rental in­come, you must re­view the na­ture of the ex­pense, pe­ri­ods the prop­erty was not avail­able to let, whether ten­ants re­ceive so­cial hous­ing sup­port and so on,” said Reilly.

Land­lords must be care­ful not to over­look any tax-de­ductible ex­penses: “Where rental in­come is tax­able, de­ductible costs might be missed — such as cap­i­tal al­lowances on the ini­tial fit-out of the house and life as­sur­ance on the mort­gage,” said O’neill

An­other area for mis­takes is in­vest­ments — par­tic­u­larly how you record and treat those in­vest­ments in your re­turn, ac­cord­ing to Reilly. “In­vest­ment funds is a par­tic­u­larly tricky area of tax leg­is­la­tion to nav­i­gate,” said Reilly.

Con­sider get­ting some pro­fes­sional ad­vice be­fore fil­ing your re­turn if you have com­plex div­i­dends or in­vest­ment port­fo­lios.

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