rent allowance in owner occupied house?

zuroph

Hi,
I have a girl renting a room from me in my house for the last year who is about to finish a postgrad and become unemployed. I read through the sticky at the top about rent allowance but am confused. Sorry if its been said already, i did try

1)Can she apply for rent allowance in general straight away?
2)Can she apply for rent allowance for here (owner occupied house)?
3)How is it paid, and how would I deal with it?
4)Is there tax implications for me?

many thanks

patrickc

zuroph wrote: »

Hi,
I have a girl renting a room from me in my house for the last year who is about to finish a postgrad and become unemployed. I read through the sticky at the top about rent allowance but am confused. Sorry if its been said already, i did try

1)Can she apply for rent allowance in general straight away?
2)Can she apply for rent allowance for here (owner occupied house)?
3)How is it paid, and how would I deal with it?
4)Is there tax implications for me?

many thanks

1.she can apply once shes on the housing list with the local authority, and if shes claiming unemployment assistance
2.yes she can, you need to be registered as accepting rent allowance, not sure who with, but you need to sign the rent allowance form the CWO gives her.
3. it's generally paid directly to you, and by the month into your bank, or by cheque.
4. you can rent a room up to a certain amount without it affecting you, and that amount I don't know

The_Conductor

patrickc wrote: »

4. you can rent a room up to a certain amount without it affecting you, and that amount I don't know

10k inclusive of all billshares/contributions of any nature towards the running costs of the dwelling. The Owner is obliged to complete an annual tax return declaring the income (irrespective of whether it is tax exempt or not). The tenancy is considered to be 'under licence', and is not subject to the terms of the 2004 Residential Tenancies Act.

S.

zuroph

tax return?! it would have been nice for someone to tell me this before now! when am i supposed to do this, and how/where?

Also, she has to apply for the housing list to get rent allowance?

snubbleste

patrickc wrote: »

..
3. it's generally paid directly to you, and by the month into your bank, or by cheque.

It's usually paid weekly in arrears to the tenant who collects it in the post office

The_Conductor

zuroph wrote: »

tax return?! it would have been nice for someone to tell me this before now! when am i supposed to do this, and how/where?

Also, she has to apply for the housing list to get rent allowance?

By October 31st of the calendar year after which the declaration refers, a personal tax return must be made. You need to account for gross income from the rent-a-room scheme (this includes contributions towards ESB, Gas, NTL or any other bills). Providing it is under the 10k cut off there is no tax due on it. Once you go over the 10k limit- the entire sub becomes taxable income at the marginal (higher) rate. Returns for up to 5 preceding years may be submitted together- when an oversight has been made. Its entirely possible that you may end up getting a sizeable refund- if you have not been claiming all your reliefs.

S.

zuroph

I've been renting room for one year now, so does that entitle me to any other reliefs, bar the tax free on <10k?

The_Conductor

zuroph wrote: »

I've been renting room for one year now, so does that entitle me to any other reliefs, bar the tax free on <10k?

As an owner occupier- no. Thats it. If you were letting the whole house- the entirety of your mortgage interest is an allowable deduction- as are the purchase cost of furniture and consumables on a flatline basis (20% of gross per annum).

S.

Rewind

Hey guys. I am living in an owner occupied residence. Am about to claim JSA and was wondering will they investigate him? He's not registered as such, but don't wanna get him in any grief cause he is a nice chap. I'm not going to make a claim for rent supplment, bust JSA.

Cheers guys.

patrickc

snubbleste wrote: »

It's usually paid weekly in arrears to the tenant who collects it in the post office

any lads ive worked with, have always had the money paid directly to the landlord...

Mrs OBumble

There are two totally separate things being discussed here.

Firstly, as a landlord under the "rent a room" scheme, you have some responsibilities. These are totally separate to the welfare system (JSA, rent allowance, etc). You need to get in touch with Revenue about these.

The second is the rent allowance. The key factor is whether the amount of rent you are charging is less than the allowable amount in your area. Quite possibly it's not (the levels are pretty low). If this is the case, then the tenant may ask you to lie to Welfare: to tell them that the rent is actually a lower amount, and then the tenant will pay you their contribution PLUS the difference.

It's up to you whether you're willing to lie to Welfare about this or not: some people would say that this is fraud, some people do it any way.

Either way, you should declare the ACTUAL amount to Revenue: apparently there's no checking between them and Welfare about this topic.

There seem to be different stories around the country re whether the allowance is paid directly to you (monthly, or maybe three-monthly, and in arrears) or to the tenant who's then responsible for paying the rent to you. It may depend on the policies of local welfare managers.