Rent a Room Question

acdublin

Hi folks,

I live in a house that I'm required to live in for work - the revenue are allowing me to designate another house that I'm about to buy as my principal primary residence (though I will basically never sleep in it - my job requires me to be on call 24/7).

There is clear guidance from revenue that when you're required to live in a house for work, that house is not Benefit in Kind and another house designated as your PPR is exempt from Capital Gains Tax

What I can't find any guidance on is Rent - a - Room. Does anyone know if I'm allowed to avail of tax relief under rent-a-room rules in my PPR (not the house I'm required to live in) in this instance?

Many thanks, ac

gerrybbadd

acdublin wrote: »

Hi folks,

I live in a house that I'm required to live in for work - the revenue are allowing me to designate another house that I'm about to buy as my principal primary residence (though I will basically never sleep in it - my job requires me to be on call 24/7).

There is clear guidance from revenue that when you're required to live in a house for work, that house is not Benefit in Kind and another house designated as your PPR is exempt from Capital Gains Tax

What I can't find any guidance on is Rent - a - Room. Does anyone know if I'm allowed to avail of tax relief under rent-a-room rules in my PPR (not the house I'm required to live in) in this instance?

Many thanks, ac

I've never seen a situation like this arise in work before.

That being said, i'd imagine if Revenue are allowing you to designate the house you are buying as PPR for one reason, they then can't say that "no, it's not your PPR" for another reason, like rent a room. However, if you are renting a room in a house you never live in, they may change the definitions and advise that it can no longer be a PPR.

HeidiHeidi

Not intending to sound smart, but surely Revenue would be best placed to answer this question?

gerrybbadd

HeidiHeidi wrote: »

Not intending to sound smart, but surely Revenue would be best placed to answer this question?

Going by that same logic, why even have this forum here then?

jjjd

One of the conditions of the rent-a-room relief is that you must occupy the dwelling as your sole residence during the year of assessment. As you have stated that you will never be staying in it and live elsewhere I don't think you can qualify.

jjjd

jjjd wrote: »

One of the conditions of the rent-a-room relief is that you must occupy the dwelling as your sole residence during the year of assessment. As you have stated that you will never be staying in it and live elsewhere I don't think you can qualify.

It does not have to be your sole residence to qualify for rent a room relief. The ops situation is not straight forward but the fact its not is sole residence would not be a reason on its own that it would be excluded from rent a room relief.

jjjd

Londyn Magnificent Tugboat wrote: »

It does not have to be your sole residence to qualify for rent a room relief. The ops situation is not straight forward but the fact its not is sole residence would not be a reason on its own that it would be excluded from rent a room relief.

I didn't state it had to be your sole residence, but you had to OCCUPY the property as your sole residence (meaning that you actually had to be living in the property at the time you are claiming the rent-a-room relief, and not be residing elsewhere), which appear's to be the OP's situation.

http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html#l1f4da

gerrybbadd

This is the Revenue info:

The room or rooms must be in a residential premises that is situated in the State and that is occupied by an individual as his/her sole or main residence during the particular tax year.

An individual may live in more than one residence but can only avail of rent-a-room relief in respect of his/her sole or main residence. In general, an individual’s sole or main residence is that individual’s home for the greater part of the time and where friends and correspondents would expect to find him/her.

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

acdublin

Thanks so much for all of the helpful replies. I'm thinking I'm going to put this one to the Revenue. The UK has very specific legislation for these situations called 'tied-cottages'. Basically they let you do anything for tax purposes with one property that you own but don't live in if you're required to live elsewhere for work.

acdublin

Further comments: I'd like to think the Revenue would take a broad view of 'main or sole residence'. If I lost my job, I'd immediately be living in the only house I own. If I died in the morning, it's the only place my wife and kids would have to live. When I retire, it's where we'll live. It is our family's sole residence, though we never live in it.

davindub

acdublin wrote: »

Further comments: I'd like to think the Revenue would take a broad view of 'main or sole residence'. If I lost my job, I'd immediately be living in the only house I own. If I died in the morning, it's the only place my wife and kids would have to live. When I retire, it's where we'll live. It is our family's sole residence, though we never live in it.

The revenue will look at each case in isolation, but on the face of it, once you rent out the house or rooms and no longer live there, it is an investment property.

The safe case for rent a room, is you rent out a room in the house where you reside. It would be risky to attempt to apply it to any other situation.

It is something you would want an tax advisor to advise properly on.

jjjd

jjjd wrote: »

I didn't state it had to be your sole residence, but you had to OCCUPY the property as your sole residence (meaning that you actually had to be living in the property at the time you are claiming the rent-a-room relief, and not be residing elsewhere), which appear's to be the OP's situation.

http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html#l1f4da

It doesn't have to be occupied as your sole residence, you are misquoting the rules. Its sole or main residence ("main residence" being a fairly vague term). You could for example have a family home down the country where your family lives and also own a house in Dublin which you use mon to friday for work. If you rent out rooms in your Dublin home you would be entitled to rent a room relief despite you also living down the country.

To me the op situation is not dissimilar to someone who is constantly travelling for work. They are never at home really, bar a few days here and there but the house is still their primary residence and rent a room relief could be claimed. The op is essentially being "put up" in an accommodation for work, same as if he was staying in a hotel but its not really his residence. he wont even get part 4 rights or have a tenancy there.

Talking to a tax advisor would be money well spent as if you can work it to fall under rent a room it will be a lovely little tax free earner, the people you rent the rooms to wont have any rights either which is another big advantage.

acdublin

Thanks for the replies on this. I hope if it's allowable it's a win-win for us and the renter, who will pay a €1000 a month plus bills for a house that would rent at €1800 on the open market.