rent a room questions?

y0ssar1an22

I have a few queries on rent a room allowance that, thus far, the internet has not been able to answer. This includes revenue, citizens info, etc. Hopefully someone on here may be able to help.

can a child of the landlord live in the house, and be an agent of the parents claiming rent a room? Or does the home owner have to live there as their PPR?

how much rent would the child be expected to pay to parents. I expect €10 a month wouldn't suffice.

how does rent a room interact with rent allowance?

thanks for reading and hopefully a few answers.

Howjoe1

y0ssar1an22 wrote: »

I have a few queries on rent a room allowance that, thus far, the internet has not been able to answer. This includes revenue, citizens info, etc. Hopefully someone on here may be able to help.

can a child of the landlord live in the house, and be an agent of the parents claiming rent a room? Or does the home owner have to live there as their PPR?

how much rent would the child be expected to pay to parents. I expect €10 a month wouldn't suffice.

how does rent a room interact with rent allowance?

thanks for reading and hopefully a few answers.

The house is your Non PPR.

Therefore Rent a room relief does not apply.

You are liable to tax under the normal Rental Income rules, which I take it you are trying to avoid.

The rent of tenants received is assessable as Gross Rent, the rent from a child does not have to be market value.

y0ssar1an22

not trying to avoid, minimise. anyway the basis for the question is from an article in sunday business post by alan moore. here is a snippet of the article if anyone can explain in pigeon english please?

'Parents buy two-bed apartment (€300k) and allow 19-year-old son in college to reside in apartment. Each parent also gifts son €3,000 per annum. Son lets second bedroom and claims rent-a-room relief on the income (€6,000). Son pays the €12,000 to the parents as rent. Parents declare the rent in their tax return.'

thats the part i'm interested in

Howjoe1

Confusing. Where is the saving? Parent's pay tax on €12K rent?

Arbiter of Good Taste

y0ssar1an22 wrote: »

not trying to avoid, minimise. anyway the basis for the question is from an article in sunday business post by alan moore. here is a snippet of the article if anyone can explain in pigeon english please?

'Parents buy two-bed apartment (€300k) and allow 19-year-old son in college to reside in apartment. Each parent also gifts son €3,000 per annum. Son lets second bedroom and claims rent-a-room relief on the income (€6,000). Son pays the €12,000 to the parents as rent. Parents declare the rent in their tax return.'

thats the part i'm interested in

Would need to see the full article in context, but the only part that makes sense is that the parents declare rent on their tax return

Howjoe1

Re Rent a Room Relief:

4.1 Sole or main residence

"......individual does not have to own the residence and it could, for example, be occupied as rented accommodation."


also

Parents can avail of small gift exemption of €3K limit CAT purposes.

still puzzled where the saving is.

Howjoe1

Got it I think.

Parent's are paying tax on rent of €12K which would arise on arms lenght arrangement.

Son is getting rent free accommodation.


Does that make sense.

Arbiter of Good Taste

Howjoe1 wrote: »

Got it I think.

Parent's are paying tax on rent of €12K which would arise on arms lenght arrangement.

Son is getting rent free accommodation.


Does that make sense.

Not really. They are giving the some €6k for him to pay it back in rent which is then being taxed?

barneystinson

Arbiter of Good Taste wrote: »

Not really. They are giving the some €6k for him to pay it back in rent which is then being taxed?

I'd read it as they are giving him the use of a property whose market rent is 12k, for 6k, which equates to a gift of 6k.

He then funds the 6k rent payable by him, by letting a room to a 3rd party under rent a room.