Claiming rent relief

cantdecide

Is it true that if you are living at home and paying rent you can claim tax relief in the same way as a typical rental arrangement?

I was told about a radio programme yesterday where this was being discussed and that you can claim back up to four years...

Ste.phen

in theory yes, but in the case where you're living with your parents they'll almost certainly investigate it to make sure it's legitimate, which it rarely is.

cantdecide

Ste.phen wrote: »

in theory yes, but in the case where you're living with your parents they'll almost certainly investigate it to make sure it's legitimate, which it rarely is.

Years of bank statements showing a standing order???

FGR

Your parents must also be registered with the revenue indicating that they are receiving rent. Do you want to hang them on the tax burden? Children renting rooms from the folks is not covered by the rent-a-room-relief scheme so your folks would be out of pocket.

Ste.phen

cantdecide wrote: »

Years of bank statements showing a standing order???

That would probably cover it, actually, but as ForegoneReality said, there could be a tax issue on your parents' side, for receiving the payment.

cantdecide

As long as they aren't earning over 10k annually, they don't have to declare it, seemingly. It was me Da who heard the radio programme and told me about it. From what I can see online, I can claim it not a bother using a RENT 1 form. I'm here to find out if anyone has a specific reason why it can't be done that I haven't heard of???

Victor

cantdecide wrote: »

As long as they aren't earning over 10k annually, they don't have to declare it, seemingly.

Its not taxed, but it must be declared.

dny123456

Probably a silly question, apologies if it is.. but how do you declare it? Is it a form, or would a phone call to the revenue suffice?

eden_my_ass

Also please note it is 10k this year, but was only ~7.5 last year, and so on....also as said your parents would have to have submitted tax returns for every year you're claiming rent relief, which I'm assuming they haven't and I doubt they can go back years now and do that (an assumption but makes sense). I really don't think its worth it in your situation although I guess if they are now allowing family claim it, you could start with last year and they could declare that income (I was always under the allusion that family were exempt)

eden_my_ass

dny123456 wrote: »

Probably a silly question, apologies if it is.. but how do you declare it? Is it a form, or would a phone call to the revenue suffice?

The landlord declares the rental income either online or in their end of year tax returns (online is much much easier!). The tenant needs to get a form off the revenue website and fill it in, you used to need the landlords pps number but I'm not sure you even need that now, then you get the rent relief back in your pay as tax credit

cantdecide

As posted, apparently you can claim back up to four years up to €300 or €400 a year...

I really can't say what would be required of the folks yet. I think I'll give it a whirl- it can't hurt to try.

gurramok

This was stopped in the budget 2008, they closed that loophole.

You're allowed to live with a stranger, but not with a relative to claim it.

cantdecide

gurramok wrote: »

This was stopped in the budget 2008, they closed that loophole.

You're allowed to live with a stranger, but not with a relative to claim it.

Just saw that (why can't all relevant online information be put together:rolleyes:) I think I can still claim for 2005 and 2006...

_Nuno_

eden_my_ass wrote: »

The landlord declares the rental income either online or in their end of year tax returns (online is much much easier!). The tenant needs to get a form off the revenue website and fill it in, you used to need the landlords pps number but I'm not sure you even need that now, then you get the rent relief back in your pay as tax credit

The tenant can also do it online, which is also much easier. The landlord's PPS number is not marked as a mandatory filed.

The_Conductor

Up until 2007 a parent or sibling could let a room in a house (be it the family home or otherwise) to a child or sibling under the rent a room scheme and earn up to a gross of (then) EUR7800 without incurring a tax liability, and the person paying the rent could claim rent-relief.

This income had to be declared in full on an annual tax declaration by the person in receipt of it, despite the fact that it would have attracted no liability.

From 2007 onwards the situation is that a parent or sibling may rent property to a child or sibling. They are not entitled to avail of the rent-a-room scheme. The income must be declared in full, and is fully taxable (less any allowable deductions).

For the purpose of both the prior and post 2007 situation- any payments by a person to either a sibling or a parent which might be construed by the Revenue Commissioners as 'a contribution towards the upkeep of the household' are not considered to be rent, do not attract a tax liability on the part of the recipient, and do not entitle the giver to a claim rent relief.

This is all addressed in Section 473 of the TCA

dny123456

How about non married couples? Is there anything stopping them from saying one rents from the other?

The_Conductor

dny123456 wrote: »

How about non married couples? Is there anything stopping them from saying one rents from the other?

First of all- a cohabiting couple are treated as a couple from a tax perspective. While you might like to get into an argument along the lines of "Prove it", really its simply a case of don't go there with the Revenue Commissioners. Particularly in the current climate it would be seriously remiss to try to bend the letter of the law in any manner, shape or form.......

If you still decided to chance your arm- I assume that its a case of one of the couple owning the property they are both residing in, and charging the other of the couple a nominal rent- possibly under the rent-a-room scheme.

First and foremost- it would necessitate an annual tax return on the part of the person receiving the rent- which for most people is a fairly onerous task (though in most cases you will find an allowance somewhere that you don't have on your cert, so you might be entitled to a small refund).

Secondly- the net gain for the person paying the rent would be only EUR330 per annum in rent relief.

Is it worth a possible audit and a load of paperwork for so small a net return? Personally I think you'd be crazy to consider it.

cantdecide

So my brother who like me, lived at home until recently got a cheque for 1,349