Benjamin Franklin famously once said, “in this world, nothing is certain except death and taxes”. And sure enough, it’s once again that time of year, as tax return season looms.
Naturally, now is a busy time for completing tax returns in Ireland. We have put together a brief guide for self-assessed tax returns due prior to 31 December, with emphasis on the impending Income Tax deadline.
You should complete a self-assessed Income Tax return if:
- You are self-employed
- You have profited from share options or share incentives
- You have Non-PAYE income
- Where your only or main source of income is
– rental income;
– investment income;
– foreign income;
– maintenance payments;
– fees that are exempt from PAYE and/or you have profited from share options or share incentives.
The deadline for the 2020 Income Tax return is 31 October 2021.
The ROS Extended Pay and File deadline for online returns is Wednesday 17 November 2021. The extended deadline is for taxpayers who file a 2020 Form 11 Income Tax return and make the appropriate payment through ROS for both the Income Tax balance due for 2020 and Preliminary Tax for 2021.
To qualify for the ROS Extended Pay and File Income Tax deadline, 2020 taxpayers must both pay and file through ROS. Where only one of these actions is completed through ROS, the extension does not apply and you will be liable to a late filing surcharge as follows:
- within two months of the filing date: 5% of your tax due, up to €12,695;
- over two months: 10% of your tax, up to €63,485.
- Be organised and gather all of your business receipts, invoices, bank statements. The following is a summary of the information you will need:
– All business and trading receipts
– Details of all rental income
– Details of any mortgage payments relating to a rental property
– Employment Income
– Other taxable income not taxed through payroll – medical insurance, company car, etc
– Share awards and stock options remunerated during the year
– Pension contributions paid during the year
– Termination/ Ex-gratia payments awarded
– Deposit interest on bank and credit union accounts
– Dividends received from shares
– Details of any exempt income such as rent-a-room relief, etc.
– Maintenance payments
– Medical expenses
– Income protection premium payments
– Foreign income including rent and pensions
- It sounds obvious, but remember to ensure you have adequate funds in your bank account to pay your liability for 2020 and preliminary tax for 2021 prior to the deadline.
- Complete and return Form 11 to Revenue by 31st October 2021.
If you wish to avail of the extended ‘File and Pay’ deadline you must register for ROS online prior to the deadline and complete both the returns and payments by 17th November. Consider appointing an accountant if you are not comfortable completing the returns yourself.
One way of reducing your tax bill is to make a pension contribution for 2020 prior to the deadline and avail of full tax relief. The pension contribution must be received by your pension provider prior to the deadline in order to be allowable in the Income Tax return for the previous year.
CAPITAL ACQUISITIONS TAX
Beneficiaries who received gifts or inheritances with valuation dates from 1 January to 31 August 2021 must also make a return prior to 31 October. The deadline for those who file a Capital Acquisitions Tax return and make the appropriate payment through ROS is also extended to Wednesday, 17 November 2021.
Valuation dates vary depending on the gift or inheritance, please see www.revenue.ie for full definitions of these dates.
LOCAL PROPERTY TAX
If you owned a property in 2021 you will need to ensure that you meet your LPT obligations for 2022. In order to do this you must:
- determine the market value of your property at 1 November 2021
- submit your LPT Return, including your valuation, by 7 November 2021, and
- pay or make arrangements to pay your LPT charge for 2022.
This can be done online through myaccount.ie or the ROS system.
CAPITAL GAINS TAX
If you dispose of an asset you must pay Capital Gains Tax (CGT) on the gains/profits on the disposal of that asset. CGT returns are due as follows:
- For disposals between 1 January and 30 November (the initial period), you must pay CGT by 15 December of the same year.
- For disposal from 1 December and 31 December (the later period), you must pay CGT by 31 January of the next year.
We hope that this guide has been useful. For further and more detailed information, please visit the Revenue website itself, with particular attention to the Pay & File guide. You can also access additional information from Citizens Information.
Private Client Manager
Metis Ireland is not a tax advisor. The above is a summary and should not be used as an extensive guide to completing tax returns. You should speak to your accountant and/or Revenue for full guidance.
Metis Ireland Financial Planning Ltd t/a Metis Ireland is regulated by the Central Bank of Ireland.
All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified financial adviser before entering any financial contract. Metis Ireland Financial Planning Ltd t/a Metis Ireland will not be held responsible for any actions taken as a result of reading these blog posts.