This is a follow up articles on Income Tax Tips and Advice. For some specific areas you may be entitled to claim relief.
Income is income from qualifying work(s) determined by the Revenue Commissioners to have artistic/cultural merit and for which the Revenue Commissioners have granted exemption from Income Tax under Section 195 TCA 1997.
Profit or gains from Woodlands
Profits or gains from the commercial occupation of woodlands in the State are exempt from income tax under Section 232 TCA 1997.
Rent-a-Room Relief Scheme
If you have let a room (or rooms) of your sole or main residence as residential accommodation and the gross rent received, including sums for food, laundry or similar goods and services, does not exceed €10,000 (for 2010 and 2011), you may be entitled to “Rent-a-Room Relief” under section 216A TCA 1997.
Where more than one individual is entitled to the rent, the limit is divided between the individuals concerned.
When calculating the relevant sums no account is taken of any expenses incurred in respect of the letting or the provision of additional services. Where the relief applies the profits or losses are treated as nil for income tax, PRSI and Universal Social Charge (USC) purposes.
You may, if you wish, elect to have any income or losses from this source assessed under normal rules.
Room rentals coming within the scope of this scheme will not affect any entitlement you may have to mortgage interest relief or capital gains tax relief on the disposal of a principal private residence.
Childminding relief is available where an individual minds up to three children (excluding their own children) in their own home. No tax will be payable on the childminding earnings received, provided the amount is not more than €15,000 per annum. If the childminding income exceeds this, the total amount will be taxable as normal under self-assessment. The annual minimum PRSI contribution for self-employed individuals of €500 per annum is payable.
Other Exempt Incomes
The following are exempt from Income Tax provided specific conditions are satisfied:
- Awards made by the Hepatitis C Tribunal
- Income arising on monies received from settlement of a civil action by a totally incapacitated individual. Income arising on monies received by permanently incapacitated individuals for damages following assessment by the Personal Injuries Board, from 2007 the return arising from the investment of these monies where the return is greater than 50% of the individuals total income and gains is also exempt.
- Income arising from compensation payments made under an employment law enacted, in accordance with a decision of one of the relevant bodies listed below or made in accordance under a mediation process:
- The Rights Commissioner
- The Director of Equality Investigations
- The Employment Appeals Tribunal
- The Labour Court
- The Circuit Court
- Patent royalties paid to the inventor from inventions devised in Ireland prior to 24 November 2010
- Sports organisations
- Income from woodlands
- Income received by Mna Tí in the Gaeltacht (Sceim na bhFoghlaimeoirí)
- Income received by foster parents from the Health Service Executive or from another body where the payment is in accordance with similar law from another EU Member State (including educational fees, certain medical expenses and other exceptional payments where complex special needs arise). In addition payments for foster children 18 or over until the age of 21 or until they complete their full time education who suffer from a disability are also exempted.
- Certain social welfare payments including payments to systematic short term workers i.e. people who do 3 days on and 2 days off work, or who work one week on and one week off.
- Lump sum payments to claimants who worked in the Magdalene Launderies
- Annual allowance paid to Reserve Members of An Garda Siochana
The exemption for Income Tax for the categories of income described below was extended to Capital Gains Tax. However, it is a requirement that the aggregate of the person’s income and gains must exceed 50% of their total income and gains in order to be exempted. The relevant categories of income and now gains are as follows:
- Income and Gains derived from the investment of certain compensation payments received by permanently incapacitated individuals or a trust established for the benefit of one or more individuals.
- Income and Gains derived from the investment of payments made to Hepatitis C and HIV victims
- Income and Gains from compensation payments made to thalidomide children and the income derived from the investment of such payments
- Compensation for certain living donors to cover compensation for expenses and loss of income relating to donations.
Should you require further help or assistance on any of the above areas please do not hesitate to get in touch with Kilcoyne Accountants and we will be happy to assist you.