Rent-a-Room relief only for the owner?

pasquale83

Hi All,

I own a house in IRL that I used to share with my girlfriend before moving abroad at the end of 2017.

For the first half of 2018, my girlfriend (no legal partnership between us) kept living in the house we used to share before moving abroad to join me in the summer of the same year.

To help her out, I have let her renting out rooms in the house she was living in and I decided to give up on any share of the income as she needed it more than me.

I am now filling my tax return and I'm not sure if I need to declare any of the rental income she earned. I was thinking that as I didn't get any of it, the rental income has to be declared in her tax return and since she was living in the same property as the people she was renting to, she can avail of the rent-a-room relief?

On the revenue website looks like she can use it as it is valid also for the non-owners of the property and she meets all other requirements: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-a-room-relief/what-type-of-residence-qualifies.aspx

What do you think? Any help it is really appreciated. Thank you!

Pawwed Rig

One could look at this a number of ways.


1. Half the value of the house accrues to you so should be taxed as such,
2. You left the house vacant and did not receive any rent,
3. Rent accrues which is a gift to your girlfriend (CAT implication),
4. You let your half of the house to your GF at €zero (again CAT),

5. GF subject to all the rent.


Revenue could reasonably take any of the positions above in which case you may be able to argue against any assessment they raise against you.

They may never raise the issue either. Hard to know with them sometimes.

pasquale83

Pawwed Rig wrote: »

One could look at this a number of ways.


1. Half the value of the house accrues to you so should be taxed as such,
2. You left the house vacant and did not receive any rent,
3. Rent accrues which is a gift to your girlfriend (CAT implication),
4. You let your half of the house to your GF at €zero (again CAT),

5. GF subject to all the rent.


Revenue could reasonably take any of the positions above in which case you may be able to argue against any assessment they raise against you.

They may never raise the issue either. Hard to know with them sometimes.

thank you for the reply. Just to clarify, she doesn't own the house, I own 100% of it.

anyway, yes it is not easy to do things right. anyway rent is around 2k euro max so I think that if they see it as a CAT she is below threshold.

3DataModem

The general rule for rental income is the person who benefits from (i.e. spends it) declares it on tax.

So even if partner 1 pays the mortgage from his income, if partner 2 collects and spend the rent then then partner 2 pays the tax.

This means that choosing who 'gets' the rent can impact tax, for owners of property who happen to be separately assessed.

Pawwed Rig

pasquale83 wrote: »

anyway, yes it is not easy to do things right. anyway rent is around 2k euro max so I think that if they see it as a CAT she is below threshold.

€2K per annum??
If it is €2K per month then she is not below the threshold.
A landlord is not obliged to charge rent unless it is a connected party scenario (which a gf is not). Gifts are market value. Look at group C threshold and small gift exemption on google.