rent tax credit + living at home

Random

right, so i know i can claim it if i pay rent (in the true sense of the word etc etc etc) to my parents while living at home.

my main query is how this would effect my parents. is it a matter of them ringing up the tax office with pps number and saying "if paddy gives me €200 a month for rent how much tax will i have to pay on it?".

will the tax office be able to give a straight answer on this? is there any other way to work it out?

thanks

phantom60

As long as the person receiving the rent is living in the house, they won't pay tax on it as long as the rent received doesn't exceed 10,000 euro.

wench

phantom60 wrote: »

As long as the person receiving the rent is living in the house, they won't pay tax on it as long as the rent received doesn't exceed 10,000 euro.

That is incorrect. The case of a child paying rent to their parent is treated as a special case where the rent a room scheme doesn't apply.
The OP can claim rent relief, but his parents will pay tax on the income at their marginal rate, probably 41%. Given that the max the OP can get back is €400, its unlikely to be worthwhile going down this route.

http://www.revenue.ie/en/tax/it/credits/rent-credit.html#section9

Merch

Random wrote: »

right, so i know i can claim it if i pay rent (in the true sense of the word etc etc etc) to my parents while living at home.

my main query is how this would effect my parents. is it a matter of them ringing up the tax office with pps number and saying "if paddy gives me €200 a month for rent how much tax will i have to pay on it?".

will the tax office be able to give a straight answer on this? is there any other way to work it out?

thanks

If I was them I'd throw you out, 200 is cheap enough and you proably have the whole of the house mostly to do as you please anyway.

Mr. Incognito

Keep it on topic and civil please.

Random

wench wrote: »

That is incorrect. The case of a child paying rent to their parent is treated as a special case where the rent a room scheme doesn't apply.
The OP can claim rent relief, but his parents will pay tax on the income at their marginal rate, probably 41%. Given that the max the OP can get back is €400, its unlikely to be worthwhile going down this route.

http://www.revenue.ie/en/tax/it/credits/rent-credit.html#section9

i'd seen the rent-a-room relief thing on the website which is why i have the concern about it.

where does it say the max i can get back is €400? i didn't see that anywhere.

thanks

wench

Its about halfway down this list
http://www.revenue.ie/en/tax/it/tax-chart.html

Random

a year? that doesn't seem right .. i thought it was monthly. i'm gonna have to read up a bit more on this.

Merch

Ok I was half kidding about throwing you out I am surprised someone would even think of going through this with their parents when paying 200 euro a month tho???
more seriously while I am all for landlords paying tax (and everyone else that is obliged to also) I think when it comes to parents or close family, Id personally draw the line there even if you are giving them a few quids.
Id say this will only give your parents heartache in the end, even if it only amounts to the hassle of filling out paperwork and the benefits for you will be minimal (by all means look into it)

On a more morbid note and I hope it is a long way away, if the property is likely to be inherited by you and your siblings and doesnt seem to come under the same rules as rent a room/lodging maybe capital gains will have to be paid?? I dont know if this is the case but whatever small gain you have made could be outweighed by that, but mostly just the hassle.

maddogcollins

My understanding is that the relief you will get is a "rent credit" meaning you will get a credit against your tax of €400. It works in the same was as single person credit. So if you are paying tax at the low rate you will get an extra €2,000 (€400/20%) tax free each year.

Merch

maddogcollins wrote: »

My understanding is that the relief you will get is a "rent credit" meaning you will get a credit against your tax of €400. It works in the same was as single person credit. So if you are paying tax at the low rate you will get an extra €2,000 (€400/20%) tax free each year.

The OP will have to clarify if they are working or not, if they aren't paying tax that will be no good to them or even if they under the tax threshold probably still no good.

WIZE

You will only receive 400 max back in a year

I have received my tax back over the Past 3 years were I was paying nearly 14000 a year rent an got only 412 per year

Merch

Random wrote: »

right, so i know i can claim it if i pay rent (in the true sense of the word etc etc etc) to my parents while living at home.

my main query is how this would effect my parents. is it a matter of them ringing up the tax office with pps number and saying "if paddy gives me €200 a month for rent how much tax will i have to pay on it?".

will the tax office be able to give a straight answer on this? is there any other way to work it out?

thanks

I'd run this by your parents before mentioning anything to the revenue, perhaps they consider you are just paying upkeep?
Do you pay for food, utilities??