Dáil Éireann - Volume 478 - 01 May, 1997

Written Answers. - Tax Returns.

43. Mr. N. Ahern asked the Minister for Finance the reason an elderly old age pensioner living in rented accommodation in a house owned by a landlord living abroad should have to collect tax on behalf of the State from the landlord's rental income; the reason notice of this is not given on the form for claiming tax relief on rent costs; if he will exclude old age pensioners from this task; and if he will make a statement on the matter. [11901/97]

Minister for Finance (Mr. Quinn): I am informed by the Revenue Commissioners that section 25 of the Finance Act, 1969 provides that where rent is paid directly to a non-resident landlord, the person paying the rent must deduct tax at the standard rate and remit this to the Revenue Commissioners. The obligation on a tenant to deduct and pay over this tax to Revenue arises only where the tenant pays the rent directly to the landlord. Accordingly, the obligation does not arise where a tenant pays the rent directly via an agent. In such circumstances, the obligation for collection of the tax rests with the agent.

Form Rent 1 has been used by individuals aged 55 years or over to claim rent relief for rented accommodation. Claims for rent relief by individuals aged under 55 years have been made on form Rent 2. A new consolidated form — form Rent 1 [1263] — which can be used by all individuals, irrespective of age, is currently being printed. The new form contains an explanatory note which sets out the tax deduction requirement applying to tenants who pay rents directly to non-resident landlords. Supplies of the form will be available in tax offices shortly.

The reason for the enactment of section 25 of the Finance Act, 1969 was to put in place a mechanism for the collection of tax on the rental income of non-resident landlords. Given the non-resident status of such landlords, this mechanism is the most efficient way of collecting tax. Accordingly, section 25 does not exempt any category of tenant, for example, old age pensioners, from the obligation to deduct the tax and pay it over to Revenue on behalf of the non-resident landlord.