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Rent a room Loophole????

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  • 29-05-2006 3:46pm
    #1
    silverroof56
    Closed Accounts Posts: 14 ✭


    I'm just making a few enquiries about the rent a room,..if anyone can shed some light.

    My understanding so far is that you can earn up to 7620, tax free on 'renting a room'.
    Long story short,..
    I live with my girlfirend,..The house is mine,..she pays me every month an agreed amount which is less than the market rate.
    But does not claim any rent relief because ,I don't really want to be a landlord.

    Is it possible for me to 'rent a room' to her,..'charge her 7,620 for the year'....ie meanwhile I am still taking our agreed amount.

    And she can claiming something like 127 per month on rent relief.!!!!

    Am I missing something here?..I know this is crafty thinking...but surely the government have more stringent rules in place.

    Basically I would like to get a situation were she is getting rent relief,..what is the best way for me to go about this

    many thanks


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    #2
    davidoco
    Registered Users Posts: 656 ✭✭✭davidoco


    She should send in the form Rent 1 claiming Rent Relief for private accommmodation. She can say she is paying €200 a month. The €137 euro a month you refer to is the max relief available which works out at a saving in tax to her of €27.50 per month or €330 for the full tax year. Crafty but not exactly a money spinner.

    You technically should send in a form 12 (return of income tax) at the end of the tax year but I doubt it if many Rent a Roomers bother.


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    #3
    utopian
    Closed Accounts Posts: 139 ✭✭utopian


    silverroof56 wrote:
    Is it possible for me to 'rent a room' to her,..'charge her 7,620 for the year'....ie meanwhile I am still taking our agreed amount.

    And she can claiming something like 127 per month on rent relief.!!!!

    Am I missing something here?..I know this is crafty thinking...but surely the government have more stringent rules in place.

    The thing you are missing is that your "crafty thinking" is called tax evasion, and is illegal.


  • Options
    #4
    davidoco
    Registered Users Posts: 656 ✭✭✭davidoco


    It's actually called "tax planning" and all the major accountany firms have whole units devoted to it.


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    #5
    utopian
    Closed Accounts Posts: 139 ✭✭utopian


    davidoco wrote:
    It's actually called "tax planning" and all the major accountany firms have whole units devoted to it.

    I'm not sure what that is supposed to mean, to be honest.

    Claiming relief on the money spent is fine. Claiming relief on money that was not spent is tax evasion.


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