|
Q. I recently purchased an investment property and intend to let it as soon as possible. I read somewhere recently that interest on monies borrowed for this purchase may not now be available for tax relief purposes. Can you clarify the position.
A. I would imagine the articles or whatever you recently read related to the Finance Bill which introduced a new requirement for those claiming interest relief on the purchase of rented residential property.
The restriction on the loan interest will only apply if a landlord had not registered with the Private Residential Tenancies Board.
The Finance Bill provisions are as follows:
Section 11 – Relief for Interest Paid on loan for Rental Property
- From 01/01/06
- No tax deduction for interest on monies borrowed for the purchase, improvement or repair of rented residential premises
UNLESS
- Registration requirements of the Private Residential Tenancies Board have been complied with fully.
- No capital allowances in respect of expenditure incurred on a qualifying premises e.g. Certain Urban areas, Resort areas and certain Islands.
- No tax relief for individual in rented accommodation.
You can obtain all the information you need regarding the Private Residential Tenancies Board by accessing their website at www.prtb.ie or at the following address: Private Residential Tenancies Board, Canal House, Canal Road, Ranalagh, Dublin 6.
Telephone: 01 8882960
Q. Can you set out the Capital Acquisitions Tax thresholds available for the year 2006.
A. As requested I have set out below the Capital Acquisitions Tax thresholds in respect of the years 2005 and 2006 so that you can see the increase.
In addition to the figures below the first €3,000 of the total value of all gifts received from any one disposer in any year to 31 December is exempt from CAT.
|
Relationship of beneficiary to donor/testator
|
Group
Threshold
Year 2005
€
|
|
Group
Threshold
Year 2006
€
|
|
Group A
|
|
|
|
|
A child of the disponer
|
466,725
|
|
478,155
|
|
A minor child of a deceased child of the disponer, or
|
|
|
|
|
For inheritances only – a parent of the disponer where the benefit which is the subject of the inheritances is not a limited interest
|
|
|
|
|
Group B
|
|
|
|
|
A lineal ancestor (other than, in case of an inheritance, a parent within the group 1 threshold) of the disponer
|
46,673
|
|
47,815
|
|
A lineal descendant (other than a child, or a minor child of a deceased child, of the disponer), or
|
|
|
|
|
A brother, sister, or a child of a deceased brother or sister of the disponer.
|
|
|
|
|
Group C
|
|
|
|
|
Any other person
|
23,336
|
|
23,908
|
Finally, I set out below the rate of tax applicable to gifts and inheritances taken from the first of December 1999 onwards.
|
|
Rate on inheritances
|
Rate on
Gifts
|
|
Gift or inheritance taken on or after 1 December 1999
|
|
|
|
The threshold amount (see above)
|
Nil%
|
Nil%
|
|
Entire excess over threshold amount
|
20%
|
20%
|
Inheritances/gifts between spouses are exempt from Capital Acquisitions Tax.
If you have any queries on money or taxation matters which you would like answered, please send them to "Your Money", c/o Examiner Publications (Cork) Ltd., P.O. Box No. 21, Academy Street, Cork.
Phil Lynch
City Chambers, 4 Lapps Quay, Cork.
© First published The Cork Examiner
|