Contact us today for services on rental income filing and property management in order to ensure that you have all the rent schedules and proper paper works for your properties.
Rental income is any income earned from the permitting another to use property that one owns or has rights over. Arises from the renting of a house, apartments, rooms, space in an office building, or other real or movable property. Rental income for business entities is mainly received in form of lease rentals under lease agreements.
Finance leases – transferring substantially all the risks and rewards of ownership and give rise to asset and liability recognition by the lessee and a receivable by the lessor .
Operating leases – resulting in expense recognition by the lessee and the asset being recognized by the lessor.
Whether a lease is a finance lease or an operating lease depends on the substance of the transaction.
Section 3(2)(a)(iii) of the Income Tax Act (ITA) provides that income arising from a right granted to another person for the use or occupation of property constitutes income chargeable to tax
Income tax on rental income:
- Preparation of the rent schedule for all let property indicating the number of the properties, gross rent received and all expenses incurred on the properties
- Deduction of allowable and supported expenses to arrive at chargeable rent
- A completed tax return including the rent schedule as support
- Submission of the self-assessment return (SAR) within six months after the end of the accounting period
- Taxes are paid in four installments on the 20th of the 4th month, 20th of the 6th month, 20th of the 9th month and 20th of the 12th month of the accounting period.
- Any balance of tax is payable by 30th of the fourth month after the end of the accounting period.
- Tax rates depend on whether the person is an individual or a corporation and whether they are resident or non-resident.