I’ll look at some topical tax issues we have seen in the first quarter of 2026. These relate to 2025 tax return work for clients and include
- Split Year Treatment
- Landlord Tax credit for non-residents and
- Microgeneration profits
- Summary
We did some training on these and other issues. In two cases, we interacted with Revenue. And in one of those, yours truly had to eat a large slice of humble pie. I was 100% convinced I was right all along, but then I wasn’t!
Split-Year Treatment
Split-Year Treatment applies to employment income only. I wrote about this before when Juan Denver left Ireland in March 2024 to move to Valencia. In early February, we did a tax return for Tadgh and his wife, Marie, who left Ireland in July 2025 for New Zealand. Both are doctors and were on good salaries here before they left. They were resident here in 2025. As a result, they would pay tax here on their worldwide income for 2025. That would include salaries earned in New Zealand
But with split-year treatment [SYT], they don’t include their 2025 New Zealand salaries in their Irish tax return. This is on the basis that they are not resident in Ireland in the current year 2026. The advantage is that they get a full year’s tax credits and lower rate bands on half a year’s salary. We ran the numbers and could see there was a refund owing to them of €15,000. The refund grew to €17,500 with claims for
- Rent tax credit
- Pension
- Medical expenses
- Tuition fees and
- Income Protection
When completing the return, I wanted to claim SYT on the return, but couldn’t find where to claim it. I filed it without claiming SYT, and Revenue issued the refund to Marie for her share of €5,200. A few weeks later, when doing a return for another client, I found where to claim SYT. It’s in the Foreign Income section for the Form 11. I amended Tadgh and Marie’s return to make the SYT claim and submitted it to Revenue.
Revenue check
We got a Revenue check, as opposed to a cheque from Revenue, through My Enquiries after the SYT claim. It read as follows
“I refer to your client’s Income Tax return for the year ending 31/12/25. I note your client has claimed split-year treatment on the Form 11. To verify this claim, please provide a copy of your client’s employment contract showing that the individual has moved abroad to take up employment or an assignment letter relating to a period of work abroad”
The date of their enquiry was the 26th of March. We sent the New Zealand contract to them on the 30th of March. On that same day, we got a note back from Revenue
“Thank you for your prompt response in relation to your client’s split-year treatment claim. Please note as the document provided is a job offer to your client and does not show that your client has taken up the position. Please provide evidence that your client is employed by Health New Zealand by providing a copy of recent payslips”
On the 31st of March, we sent them a payslip from Health NZ dated the 22nd of March 2026. Surely that would be the end of it, but alas, no. There was another Revenue follow-up yesterday
“Thank you for providing your client’s payslip for March 2026. To verify that your client moved from Ireland on the 05.07.25, I will need you to provide evidence of this, such as payslips for 2025 from this date or travel documents that show the date of travel.
I’m losing the will to live at this stage. First, it was a contract, then a 2026 payslip, and now a 2025 payslip or travel documents.
We are getting there, slowly!
Landlord’s Tax Credit
When I write about the landlord’s tax credit, I am usually giving out. That’s because the credit is small, finicky, and you have to be the 7th son of a 7th son to get it. Plus, my experience of calculating and claiming this has brought nothing but pain. It took Revenue 8 months to get this right last year for the 2024 return. But my view changed when we were doing 2025 returns for non-residents in early 2026.
We try to get the non-resident tax returns done early in 2026, as most, if not all, are in tax refund positions. The correct name for the landlord tax credit is Residential Premises Rental Income Relief or RPRIR. For 2025, it is worth up to €800. The landlord credit was there in all its glory, showing the €800 credit, for the first two tax returns we did. I’m thinking.
“This is brilliant, Revenue have finally got their act together, and we won’t have all this hassle we had in 2025.
€13 Problem
But then, a ridiculously low number of €13 appears as the landlord’s tax credit. The number should be €400, being 50% of the available credit, as the client owns 50% of the property. Here we go again. I think! More over and back with Revenue to sort this.
| Net rental income after losses and cap all | €6,005 |
| Percentage ownership of the premises | 50% |
| Available relief from the premises | €601 |
| Capped relief for 2025 | €13 |
The client’s tax refund was €387 short, and I wasn’t having it. I didn’t agree with the Revenue refund per column A of the self-assessment panel. I increased the refund by €387 and included the extra tax owed to the client in Column B of the self-assessment panel. Revenue issued an assessment agreeing with my higher refund amount. A few days later, they issued an amended assessment agreeing with their lower tax refund.
On the 20th of January, I sent Revenue a message on MyEnquiries.
“The issue that arises is the landlord tax credit. His credit for 2025 should be €400, being 50% of the max credit for the year of €800. However, per your calculation, you have given him a capped landlord credit of €13.
Can you please issue another amended assessment that agrees with our figures, as per column B of the self-assessment panel, as these are the correct figures?
Correct figure
It turns out the Revenue number is the correct figure. The client’s landlord credit for 2025 was €13. Revenue were right, and I was wrong. With my tail between my legs, I went back to the client to inform him of my error and also did the walk of shame with Revenue. I looked into why their number was €13 and found the answer.
The landlord tax credit is apportioned between income liable to Irish Tax and worldwide income. The personal tax credit is apportioned in the exact same way. But we are familiar with apportioning the personal credit, but not so with the landlord credit. The client’s Income split was as follows
| Income chargeable in Ireland | €6,005 |
| Worldwide income including Irish income | €183,156 |
| Percentage of Irish to worldwide | 3.278% |
| Landlord credit €400 x 3.278% | €13 |
| Personal tax credit €2,000 x 3.278% | €66 |
The client forgave me, and Revenue had their victory.
Other non-resident clients
As mentioned, two non-resident clients got the full €800 landlord tax credit for 2025. What did they get full credit, while the other guy only got €13? Different circumstances. One client lives in Croatia. Because he’s living in the EU, and more than 75% of his income is liable to Irish tax, he gets full tax credits here. So, he gets the full personal tax credit of €2,000 and the landlord credit of €800.
The second client is living in Canada. He has no income outside of Ireland. As the full amount of income is liable to Irish tax, he also gets 100% entitlement to tax credits here.
Microgeneration Profits
Microgeneration profits is a new one to me. I saw this last week for the first time. We send a checklist to clients with about 30 questions. This helps us and helps the client remember stuff. On the client’s sheet, she said
Micro generation €766.29
From memory, I knew there was an exemption of €400, which was €200 before that. I had to do some digging. Lo and behold, Revenue have a Tax & Duty Manual about this! It’s dated January 2026, so it’s pretty new to them, too. The introduction to the manual states
“There is no requirement to declare profits up to the limit of the exemption in an income tax return. Any amounts in excess of the exempt amount must be declared as income in the year of assessment.
The exempt amount was €200 and increased to €400 from the start of the 2024 tax year, and it remains at that figure for 2025.
Exempt Profit
The exempt profit applies to an individual from the microgeneration of electricity. This means there is
- The generation of electricity
- from renewable, sustainable or alternative sources of energy
- by an individual
- at his or her sole or main residence
- for his or her consumption
- during the period 1 January 2022 to 31 December 2028
The profits exempted are from the domestic generation of electricity supplied to the national grid.
Revenue have a commentary confirming that, in most cases, the profits are not coming from a trade. It is passive income. They do say that any income or credits received instead of payments must be included in the profit calculation. They also confirm that expenses incurred wholly and exclusively in generating the profits can be deducted. However, they do confirm that there is no deduction for any capital expenditure. Nor is there a deduction for capital allowances on solar panels or wind turbines. That would make sense given that it’s not a trading enterprise.
Tax return
Revenue go on to note that there is no need to include the exempt profits in an Income Tax return Form 11 or Form 12. So, if your profit is €400 or less, there’s no need to include it in your tax return. But when the profit is greater than the exempt amount, then you must declare the excess. That excess is liable to Income Tax, PRSI, and USC.
The example they give is a lady called Eleanor who received €500 in credits from her supplier in 2025. This is for the electricity she sold back to the grid from solar panels in her home. She didn’t incur any expenses. As a result, her profit is €500. There is no tax on the first €400. The excess of €100 is taxable income, and she should include this in her Tax return for 2025.
Summary
I know this is a mixed bag this week. Revenue are guarding the public purse very well when it comes to issuing a refund for split-year treatment. That relief also applies in the year you arrive in the country. Any employment income earned before your arrival is not included as part of your Irish income for that year. That’s on the basis that you are resident in Ireland the year after your year of arrival.
The landlord tax credit is a lesson learned. Don’t always assume I’m right and Revenue are wrong. There are a whole host of other tax credits that this applies to. One to watch! As for the microgeneration of electricity, it will be small beer for now, but it’s a new question for our tax checklist. As a taxpayer, you must return all your income, and you don’t want to get caught out for something small. This could create a big mess down the line or lead to surcharges where you haven’t filed a complete tax return.
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