I am advised by Revenue that tenants in common hold a property in separate shares. The proportion of the property which each tenant in common holds will be specified in the deed which transferred ownership of the property to them. It appears on the basis of the information supplied that the tenants in common hold this property in unequal 60:40 shares, and presumably are entitled to any rental profits in the same ratio.
The Irish income tax system is based on self-assessment. Taxpayers are required to file tax returns stating their income and deducting any allowable losses, expenditures, reliefs, etc. Taxpayers are taxed only on income earned or profits/gains made in a taxable period. In this scenario, each tenant in common would be entitled to a share of the rental income in proportion with the share of the property they hold.
I am advised by Revenue that the proposal in the Deputy’s question, which would appear not to be in keeping with the terms of the relevant tenancy in common, would not be appropriate. The Taxes Consolidation Act 1997 does not provide that taxpayers can declare income, profits or gains to which they are not entitled; that one taxpayer would declare income which belongs to another taxpayer; or that taxpayer A would ask taxpayer B to declare income belonging to taxpayer A. It would not be correct for one tenant to declare 100% of the rental income from a property when she/he was only entitled to a share of such income, and for the other tenant not to declare income to which she/he was entitled, and for which she/he is liable to tax.
Also, if the tenants in common proceeded in the manner suggested, the tenant in common who did not declare any rental income may not be in a position to claim all the allowances, credits and reliefs to which she/he is entitled.