Gintax answers Sunday Independent readers’ questions on tax.
Article published on 14 July 2024

‘I’m a travel content creator. Will I RECEIVE a tax bill for my free trips and gifts?’

Q I’m in my early 20s and started posting travel-related content on social media about two years ago, hoping to earn some money outside my day job. I’ve built up a good following and regularly get to eat out at restaurants, go on trips and receive gifts, mostly in exchange for posting content about them. I use hashtags such as #ad or #gifted but I recently heard I may also have to pay tax on anything I get for free. I’m now living in fear of getting a letter from the taxman. How do I put my house in order?

Niamh, Co Wicklow

While there are no specific tax rules for influencers/content creators, the laws are designed to be sufficient to catch all profits.  In brief, income in return for provision of a service, that service essentially being advertising, will be taxable.

The sensitivity for influencers/content creators is determining what exactly that income or profit is.  Receiving a product or other benefit in exchange for a service is quite different to the receipt of cash for that same service.  Valuing this "income" is not easy, especially where there is no obvious monetary value to be put on the receipt.  Furthermore, entitlement to a tax deduction for relevant expenses would need to be determined e.g. the cost of the hair/makeup session required in advance of that “sponsored” restaurant visit.

Matters can also be confused by fact that we have a ‘gift tax’ regime in this country.  This will not apply where you have an agreement (formal or informal) to post content i.e. to advertise.  Here you are essentially providing a service in return for consideration i.e. the “gift” is actually income.   The area of ‘unsolicited’ gifts can be precarious; in your case, posting such product/service online with hashtag #ad could bring you into taxable income territory on the “gift”.   The position might be different depending on the exact scenario.

I understand that it is on the agenda of Revenue to issue formal commentary on this topic.  I do not envy them as it will be difficult to provide a general approach where the ambit of benefits can range from a limited-edition lipstick to a weekend getaway break.  However, this guidance is eagerly awaited as even tax professionals are grappling with the area  – so it is exceptionally difficult for a young content creator to determine their position.  

Where the value of your benefits is substantial, I would advise you speak to a local accountant; they will charge a fee but at minimum, will be able to give you guidance here and recommend an approach.   Your activity is recent so you may still be within the timelines to be fully tax compliant.   If the value is small, then it may make more sense for you to contact Revenue directly.

Ireland has no de-minimis exclusion for tax obligations -broadly, if you receive any additional income (outside of say, wages/salary), then you will need to include it in an annual tax return.  

‘I live in Australia and inherited a vacant family home in Ireland. Would there be any tax implications if I let my friend live in the house rent-free?’

Q I’ve been working in Australia for the past couple of years and recently inherited the family home in Ireland. I paid inheritance tax on it but it’s been empty for a few years now, and I’m worried it’ll fall into disrepair. A friend of mine recently moved home from Australia with his family and can’t find anywhere suitable to live. I was thinking of letting them stay in the house for free in exchange for maintaining it. But someone mentioned that this arrangement could lead to a tax bill. If so, what do I do? And if I do have to charge them rent, how do I pay tax on my rental income from abroad?

Shane, Perth

A If you provide the property rent-free, then it will be within the scope of Ireland’s Gift Tax regime (CAT) on the value of annual benefit.  You should have no personal Irish tax obligation in this instance and the tax obligations will rest the beneficiary

Your friend’s deemed annual gift will be the rental value of the house – to the extent he maintains the property (i.e. he bears costs normally to be incurred by a landlord) then he should be entitled to a deduction for these costs in ascertaining his taxable benefit. 

The rate of CAT is 33 per cent but there is a €3,000 annual exemption available.   Assuming he received no prior benefit, then he should also have his full “Group C” tax-free lifetime threshold of €16,250 to offset the benefit in the initial year(s).  Where the ‘rent free’ arrangement is also with his partner/spouse, then they may also be entitled to the annual exemption and the Group C threshold. 

If you charge rent, then you will be subject to Irish income taxes on your rental profits.  As you have no other Irish income, it is likely the income tax rate will be 20 per cent.   As a non-resident landlord, then specific rules apply. Broadly, either the tenant will need to withhold tax on the rent or you appoint an Irish collection agent.   Irish Revenue have introduced a new online portal to facilitate arrangements here.  In all circumstances, an annual tax return will be required.  In my experience the tax payments by either the tenant or collection agent would be sufficient to meet any liability, usually resulting in a small tax refund for the landlord on filing the return.  Otherwise, the landlord can make payment via (for example) bank transfer.  

You will also need to obtain Australian advice; I would expect the Irish rental income to be subject to Australian tax, with a credit(offset) available for Irish tax.