Rent a Room Scheme/Rent a Room Relief Question

jedhed90

My wife and children and I live in our "principle private residence" (family home). My wife just got offered a temporary (1 year) contract to work with an organisation in a neighbouring county. We have decided that she and our children will move out for one year, and rent a house close to her new job. I will remain at home for the year. We will then all move back in together, in our family home, after the year is over.

Renting another property close to my wifes work is going to be expensive for us. We are wondering if we could let out our childrens bedrooms (2 rooms) in our family home, for the year, and avail of the rent a room tax relief scheme on the income?

Technically, the house remains my principle private residence.....as I will be staying on there!....but not my wifes?!

we are obviously jointly assessed for tax.

Above all, we don't want to do anything inappropriate.
However, I think this could be regarded as reasonable under the scheme??

thank you in advance for your advice/opinion.

Heres Johnny

jedhed90 wrote: »

My wife and children and I live in our "principle private residence" (family home). My wife just got offered a temporary (1 year) contract to work with an organisation in a neighbouring county. We have decided that she and our children will move out for one year, and rent a house close to her new job. I will remain at home for the year. We will then all move back in together, in our family home, after the year is over.

Renting another property close to my wifes work is going to be expensive for us. We are wondering if we could let out our childrens bedrooms (2 rooms) in our family home, for the year, and avail of the rent a room tax relief scheme on the income?

Technically, the house remains my principle private residence.....as I will be staying on there!....but not my wifes?!

we are obviously jointly assessed for tax.

Above all, we don't want to do anything inappropriate.
However, I think this could be regarded as reasonable under the scheme??

thank you in advance for your advice/opinion.

On first reading it does seem fine......once you are legitimately living there yourself and not just claiming to be, but I have no reason to doubt your honesty. Check it with revenue though, a quick phone call or letter should do.

I am in a similar situation myself, my girlfriend lives a few miles away from me and we both own our own houses. I have been spending a lot of time there, most but not all nights, but my house is still my home, when she is away for example I stay in my own house not hers. I just starting thinking how much of a waste it was my house being empty being a 3 bed so I out 2 rooms up on daft today to see what the interest in them is, who applies etc......the dream is a shift worker in one of the high tech local multinationals that has ties at home elsewhere in the country and returns there when off shift, and will just be here for a 3 days a week or so. I will reflect this in rent too to the correct applicant, assuming I find one.

We have a bit to go in relationship before I move in officially but for now it suits. If and when I move in officially (marriage) I will be selling my own house, not letting it out. No way. Not with the market we have in this country.
Maybe you are thinking the same way wanting to keep control of your house.

VonBeanie

Sounds OK.

AFAIK a married couple can only have one PPR between them. As you will be remaining in the property, and its the property you jointly own, and you will all be back in the property again after 1 year, I cant see Revenue having a problem with it being designated as your PPR.

Just to note, your spouse could not rent out a room in the property they are staying in as well, and claim rent a room relief on that income.

toby2111

On a side note, does a person who avails of rent a room scheme have to file tax return? Even if it's under the threshold allowed?
And if so, am I right in saying that 2017's return is not filed until October 2018? Or is there an way on Revenue online to back date it?

jedhed90

you are right about the 2017 return not being filed until beginning of oct 18.
I am fairly certain that you have to make a return declaring the rent a room income. - however not 100% certain - so maybe wait for someone else to clarify also.
thank you for the views on my situation at the beginning of the thread.

Does revenue have a mechanism for allowing people to make queries like these? Is it just a matter of ringing them up and taking the verbal advice that you get over the phone?

Thank you

Aye Bosun

toby2111 wrote: »

On a side note, does a person who avails of rent a room scheme have to file tax return? Even if it's under the threshold allowed?
And if so, am I right in saying that 2017's return is not filed until October 2018? Or is there an way on Revenue online to back date it?

Yes, you need to declare it including bills or services which you may charge for, if you go a penny over the limit you will be taxed on it all.

There is a facility with revenue online where you can declared it under exempt income on the form 12.

You will be able to back date it for a few year, 5 I think. I did when I started, as it was 3 years before I heard I need to declare it. I had no come back for declaring late. Just keep good records, as they may audit you.

check out this link for a bit more info
https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-a-room-relief/index.aspx

toby2111

Aye Bosun wrote: »

Just keep good records, as they may audit you.[/url]

What records do you keep? I thought I read somewere that people renting rooms don't need contracts or rent books but I could be wrong....

Samuel T. Cogley

toby2111 wrote: »

What records do you keep? I thought I read somewere that people renting rooms don't need contracts or rent books but I could be wrong....

We use a rent books with the RTB stuff crossed out and bank transfers to back that up.

Sleeper12

You must notify revenue that you are availing of the rent a room scheme.

You can receive up to 14k per tax year under the scheme. If you start in May then you can take in 14k between May and the end of the tax year. If you continue to rent till next May you can take in another 14k between the start of the next tax year and next May.

I'm doubt that you will get that much rent but if you start halfway through the year technically you can receive up to 28k tax free

Aye Bosun

toby2111 wrote: »

What records do you keep? I thought I read somewere that people renting rooms don't need contracts or rent books but I could be wrong....

I just keep a spreadsheet, details include date of payment, what it's for ie bills or rent and the amount. All money paid to me goes thought my bank account so easy enough to keep track of.