2nd home daughter renting rooms - tax liability?

JimmyVik

Claw Hammer wrote: »

Her status in the property is one thing. The issue is whether she is getting a gift of the rent from her father consequent on the provision of the accommodation.

If she is looking after the property while staying in it then I would see it as a favour to her father, not a gift.

Claw Hammer

JimmyVik wrote: »

If she is looking after the property while staying in it then I would see it as a favour to her father, not a gift.

Taking his rent and putting it in her own purse is a favour to her father?

JimmyVik

Claw Hammer wrote: »

Taking his rent and putting it in her own purse is a favour to her father?

Living in the house and maintaining it is. She is probably paying the bills too.

He doesnt care if she sub lets or not. Shes not taking her fathers rent. He is paying her tuition in return for her looking after his property.



Im living rent free in a granny flat. I keep it secure and do the maintenance around the place. win/win.



I think the OP will be ok.

Claw Hammer

Claw Hammer wrote: »

Taking his rent and putting it in her own purse is a favour to her father?

Assuming the house would be left empty and costing him money otherwise then yes.

I get the feeling this house would not be rented out regardless.

Also nothing wrong with a lease with zero rent. You obviously dislike the situation and are trying your best to claim its not allowed when it clearly is.

JimmyVik

Noemi Moldy Apprentice wrote: »

Assuming the house would be left empty and costing him money otherwise then yes.

I get the feeling this house would not be rented out regardless.

Also nothing wrong with a lease with zero rent. You obviously dislike the situation and are trying your best to claim its not allowed when it clearly is.

Sometimes people will tear things apart looking for the finest grain of law. When in reality it doesnt matter at all.


If the OPs daughter is subletting rooms in her dads house while he lets her live there in return for looking after the place while she is at uni, there wont be any issues. Hundreds do it.

Neowise

Claw Hammer wrote: »

Her status in the property is one thing. The issue is whether she is getting a gift of the rent from her father consequent on the provision of the accommodation.

While she is in full time educations, she is a dependent of his, so it is not a gift, he is providing a roof over the head of his dependent while they are away in full time education while being his dependent. That's a normal thing to have to do for your dependents and the revenue except you to do this if you have dependents.



While she is living there, it's her main residence and she can rent out rooms under the rent a room scheme.


I can do links now source Your main residence is your home for most of the year and where friends would expect to find you. You do not have to own the property to claim relief.

davindub

Marcusm wrote: »

This is tiresome; in order to formalise her occupation of the property he can grant her a lease for nil consideration (documented as a deed to ensure its validity in the absence of consideration) but even Revenue would not look for this level of documentation in circumstances such as these. The question is who the tenants pays the rent to and respects as landlord and whether that person retains/uses that rent.

Hannaho has shown an ability to understand the basic arrangements and it is up to him/her to formalise it.

Any reason you are not explaining your experience?

Hannaho is relying on your experience and advice, the former which you have not really explained enough to determine how you have deducted 811c would not apply to a nil lease created to allow his daughter avail of a tax free income while reducing the income tax he would pay to provide for his daughters education.

Graham

Mod Note

everybody here is commenting in a personal capacity. Nobody is giving professional advice. Nobody is under any obligation to state their credentials.

DubCount

Graham wrote: »

Mod Note

everybody here is commenting in a personal capacity. Nobody is giving professional advice. Nobody is under any obligation to state their credentials.

100% correct. Take your interpretation of choice and call your accountant to confirm your interpretation. Better still, call Revenue and get their view. If its a legal form of tax avoidance, they will confirm it.

Hannaho

Hi! Everyone, thanks for your advice. I got the advice of a tax consultant yesterday, and he said that my daughter can stay in the house and rent out the rooms, and claim the rent a room allowance. He advised that all bills be in her name - which they will be - as we have just transferred the gas and electricity bill into her name. She will also be paying the Internet when it's set up. The only bills we will retain will be the property tax and the house insurance which will be about 1000 per year. It's not a tax avoidance. The house is very close to the University she will be going to, whereas we live currently in a commuter town two bus rides from the University. Also, our son will be living in the house and will be attending a private school for 6th year which is only a 20 minute walk from the house. To add another layer of complexity - we will be renting the spare room in our own house to a work colleague of mine who travels up from Kerry to work in Dublin 4 days per week - that will be the rent a room scheme in our own home.

Daddy Ireland

Gosh thats a surprise. Purchased a house in my sons name a couple of years back with the intention of getting it transferred back to me after 4 years in Uni. He was attending Uni and renting out rooms under rent a room scheme. I never thought for a minute that I could have put the house in my name and had him living there and claim the rent a room scheme. I thought it had to be your PPR. Truly surprised.

Hannaho

Daddy Ireland, it will be her PPR. Looking at the reading of the legislation, to check up on what the tax accountant said, it is the place where her friends are most likely to find her. She will be paying the gas, electricity, internet. For college, she will be giving that address - she won't have a second home address. For my son's 6th year school - all his reports and correspondence from the school will be going to the address he shares with his sister. So how would the house not be their PPR?

Daddy Ireland

Not saying its not their PPR. Merely saying I coukd have done what you did and put the house in my name rather than have to go to the expense in a couple of years time having to fork out for transfer of ownership costs.

davindub

Daddy Ireland wrote: »

Not saying its not their PPR. Merely saying I coukd have done what you did and put the house in my name rather than have to go to the expense in a couple of years time having to fork out for transfer of ownership costs.

You might be lucky you didn't.

Hannaho, I hope it works out for you, but with no offense to your tax advisor (hopefully chartered), but paying expenses and routing mail to that address sounds like resolving your daughters entitlement to rent a room.

Pkiernan

its a shame this thread got completely derailed by the same cowboy spewing his half knowledge and unreliable conclusions.

To save people having to wade thru his misinformation, the OPs kids can live there rent free and avail of the Rent a Room programme.

davindub

Pkiernan wrote: »

its a shame this thread got completely derailed by the same cowboy spewing his half knowledge and unreliable conclusions.

To save people having to wade thru his misinformation, the OPs kids can live there rent free and avail of the Rent a Room programme.

Well thank you for simplifying a complicated tax matter. I'm sure you are aware that tax avoidance advice is rampant in the sector and revenue recommend engaging a "competant" tax advisor as a result.

It is a pity some posters bother to get such tax advice when you are available to give full stack information: tax/ legal advice anonymously or maybe complain about lefties or how unfair it is that the wage subsidy scheme is not extended to LL's.

Graham

Mod Note

knock it off.

Pkiernan

davindub wrote: »

Well thank you for simplifying a complicated tax matter. I'm sure you are aware that tax avoidance advice is rampant in the sector and revenue recommend engaging a "competant" tax advisor as a result.

It is a pity some posters bother to get such tax advice when you are available to give full stack information: tax/ legal advice anonymously or maybe complain about lefties or how unfair it is that the wage subsidy scheme is not extended to LL's.

I wasn't referring to you by the way.

The OPs situation is not very complicated, and his question was correctly answered quite early in the thread.
Then the thread was reduced to the absurd and lost any usefulness to landlrods with genuine questions.

davindub

davindub wrote: »

Well thank you for simplifying a complicated tax matter. I'm sure you are aware that tax avoidance advice is rampant in the sector and revenue recommend engaging a "competant" tax advisor as a result.

It is a pity some posters bother to get such tax advice when you are available to give full stack information: tax/ legal advice anonymously or maybe complain about lefties or how unfair it is that the wage subsidy scheme is not extended to LL's.

But it’s not complicated at all, it’s very simple. The ops daughter can clearly operate under the rent a room scheme in the scenario described. There is no need to delve any deeper than that.

They have even gone and had it confirmed by a tax advisor yet you still won’t accept it.

Claw Hammer

I wonder about this thread. Why didn't the OP bring his accountant in the first place? First of all because an accountant and later a tax accountant. Most accountants do not know an awful lot about tax. If the OP has a specialist tax accountant on call, a must have quite a complicated financial life.

august12

Daddy Ireland wrote: »

Not saying its not their PPR. Merely saying I coukd have done what you did and put the house in my name rather than have to go to the expense in a couple of years time having to fork out for transfer of ownership costs.

It's not as simple as that, you could also be liable for a substantial inheritance bill as the house would be transferred from child to parent.

Daddy Ireland

august12 wrote: »

It's not as simple as that, you could also be liable for a substantial inheritance bill as the house would be transferred from child to parent.

Loan given to son and to fully repaid on sale of house. Agreement in place.

davindub

Noemi Moldy Apprentice wrote: »

But it’s not complicated at all, it’s very simple. The ops daughter can clearly operate under the rent a room scheme in the scenario described. There is no need to delve any deeper than that.

They have even gone and had it confirmed by a tax advisor yet you still won’t accept it.

Rent a room is not the issue for the daughter.

It is the income tax liability of the parent.

I didn't say I wouldn't accept it, I know what actions an accountant or tax advisor must do to confirm it is safe to conduct this transaction. So either they have a client who has been audited and this was cleared or they have issued an expression of doubt and resolved it or somehow they have managed to get Revenue to issue advice on this (generally avoided as complex issues will be referred higher to be answered and it highlights the client....). I haven't done the actions above, and my concern is that many persons here are giving advice on a matter they really don't know about. That concern may or may not extend to the tax advisor, who if chartered I would trust, but someone else, I would be checking their experience on the matter.

davindub

Pkiernan wrote: »

I wasn't referring to you by the way.

My apologies.

brisan

Claw Hammer wrote: »

I wonder about this thread. Why didn't the OP bring his accountant in the first place? First of all because an accountant and later a tax accountant. Most accountants do not know an awful lot about tax. If the OP has a specialist tax accountant on call, a must have quite a complicated financial life.

Maybe his normal accountant has a tax accountant on call

Claw Hammer

brisan wrote: »

his normal accountant has a tax accountant on call

Maybe. I would seem all the more reason to have put the question to the accountant first rather than come on here.

Graham

Mod

Claw Hammer, you are welcome not to participate in threads that you think should be reviewed by a professional in advance.

For many posters, one of the best things about boards is the opportunity to ask questions and learn more before approaching a professional.

Feel free to continue this particular line of debate in the feedback forum rather than derailing this thread.