Q&A

 I see continuing references to the Revenue only allowing claims back four years, but when does the four years begin and end. As an example, allowing that in the case of non-PAYE payers, ie "self-employed" tax returns for year to December 2007 are not due until the end of October 2008, does 2007 rank as a current year with the four previous years being years 2006, 2005, 2004 and 2003?

In the case of capital gains, must a refund of an overpayment be claimed in the year in which it occurs or, allowing that a loss can be offset in a future year, can a refund be claimed at any time in the future?

This also gives rise to the question as to whether one can obtain from the Revenue a payment for a loss arising from any cause?

In a separate article this month to the effect that nursing home fees paid on behalf of a parent are not subject to the previous exclusion on claims for the first €125/€250 incurred in any given year, does this change apply to all medical costs as claimed on a Med1 form?

ST, Limerick

A Different jurisdictions have different rules about how far back a taxpayer can claim refunds of tax overpaid. In the UK, I believe the figure is currently five years but in the Republic it is now four years after the rules were tightened a number of years ago.

The four years are the years immediately preceding the current tax year. Thus, if you are submitting a claim in 2008, you are entitled to claim in relation to tax paid as far back and including 2004. The fact that you do not have to make your return for last year until October 31st next has no bearing on the issue.

In relation to capital gains tax, I am not sure how such an overpayment would arise under the current system. You pay tax on capital gains in the first nine months of the year by October 31st of that year and on the remaining three months of the year by January 31st of the succeeding year.

While it is perfectly possible that gains in the first nine months could be offset by losses in the final quarter of the year, the resulting refund should be claimed in the second return (the one filed by January 31st).

If this is not done, my understanding is that it can be claimed later - within the rules outlined above.

No, you cannot necessarily obtain a refund for a loss arising from any cause.

On the issue of Med1 forms, which allow you to claim a tax rebate against certain medical expenses incurred in a given year, the €125 (per single person claim) and €250 (per family claim) exclusions that used to apply have been abolished - but only for claims relating to 2007 or later. If you are claiming for 2004-06, the exclusion still applies.

Q I read your column on Hungarian property tax. Do you know what the position is in Portugal?

Mr GC, e-mail

A As with all foreign property issues, I advise the acquisition of specialised professional advice. Indeed, in the case of Portugal, I am told it is obligatory to appoint a local tax adviser to handle your affairs in that state.

Broadly, as a non-resident, you will be liable to income tax on any rental income in Portugal at a flat rate of 25 per cent. Unlike Ireland, you are not allowed to deduct the costs of your mortgage before assessing net income, although you can make allowance for maintenance costs. While there is no dedicated capital gains tax, capital gains are lumped in with income so this too will be taxable at 25 per cent. However, again unlike Ireland, there is provision to take account of the impact of inflation over the period of your ownership.

Should you bequeath the property to a family member, I gather there is no capital acquisitions tax in Portugal, but the beneficiary would be liable to that tax in Ireland, providing they are tax resident here.

Of course, as with most of the Mediterranean states, you face local property taxes regardless of whether you rent the property. This is called imposto municipal sobre imoveis and is levied at rates that vary depending on the age, value and location of the property.

In general, they range between 0.5 per cent and 0.8 per cent per annum.

There is a double taxation agreement in force between Ireland and Portugal, which means you receive credit here for any income or capital gains taxes paid in that state.

Please send your queries to Dominic Coyle, QA, The Irish Times, 24-28 Tara Street, Dublin 2 or by e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering questions. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.