Halves on a house

lozenges

New question (somewhat related)
If two adult siblings buy a house jointly (mortgage, not cash) for their parent to live in what would be the tax implications? If the parent is retired.

davindub

davindub wrote: »

For gods sake, your IT return...…it's 3k short....that is where the offense is being committed. Whomever files it for you signs and submits and when they do, there is a nice red warning about deliberate or carelessly submitted returns. So no lack of knowledge on the subject.

Why would your income tax return be 3k short? Firstly a large number of people don’t make a tax return as they are paye and secondly a private gift of 3k or under does not need to be filed, it’s not income it’s a gift.

You don’t even need to make a return on the gift if it’s over 3k unless it’s over 80% of the category threshold.

davindub wrote: »

Have you experience in telling revenue to go sing for it? I'll tell you if revenue ask you to make a prompted qualifying disclosure and you didn't rectify the above = prison time as well as the interest and penalties.

As I stated it is tax evasion, I am categorically telling you, if you reduce your Case V income by 3k in lieu of a gift, you are committing an offense by filing. I don't know what tax advisor you used, but if you have done this on the advice of one, you had better rectify the situation.

To me it looks like you are confused? Are you talking about the person in receipt of the rent declaring 3k less than they receive? As if you are I don’t know why you are, that’s not what’s being discussed. Why would they do that especially in this situation where the money is tax free?

This discussion is not about the person who received the rent it’s a about the person who gets an unrelated cash gift.

Person A owns half a house, pays half the mortgage and doesn’t live there.
Person B owns half a house, pays half the mortgage and lives there. They also rent out a room under the rent a room scheme and they keep all the rent. They declare all the rent and claim rent a room relief thus pay no tax on it.

Once a year person B gifts person A 3k. No tax or declaration required on either side as it’s exempt under the small gifts exemption.

davindub

Alonso Big Cargo wrote: »

Why would your income tax return be 3k short? Firstly a large number of people don’t make a tax return as they are paye and secondly a private gift of 3k or under does not need to be filed, it’s not income it’s a gift.

You don’t even need to make a return on the gift if it’s over 3k unless it’s over 80% of the category threshold.




To me it looks like you are confused? Are you talking about the person in receipt of the rent declaring 3k less than they receive? As if you are I don’t know why you are, that’s not what’s being discussed. Why would they do that especially in this situation where the money is tax free?

This discussion is not about the person who received the rent it’s a about the person who gets an unrelated cash gift.

Person A owns half a house, pays half the mortgage and doesn’t live there.
Person B owns half a house, pays half the mortgage and lives there. They also rent out a room under the rent a room scheme and they keep all the rent. They declare all the rent and claim rent a room relief thus pay no tax on it.

Once a year person B gifts person A 3k. No tax or declaration required on either side as it’s exempt under the small gifts exemption.

Regurgitation of unrelated matters is not going to be helpful. Thresholds, small gift exemptions are all CAT matters which only apply if it is a gift, this is rental income you are trying to disguise as a gift.

1874

davindub wrote: »

Regurgitation of unrelated matters is not going to be helpful. Thresholds, small gift exemptions are all CAT matters which only apply if it is a gift, this is rental income you are trying to disguise as a gift.

TBH the 2 dotn have to be connected, the person receiving rent a room benefit is availing of that, they can seperately gift anyone 3k if they please, the occupant is availing of rent a room, its npt like they are renting the property, Id say there are bigger things for revenue to go chasing than things which they already approve of.

davindub

1874 wrote: »

TBH the 2 dotn have to be connected, the person receiving rent a room benefit is availing of that, they can seperately gift anyone 3k if they please, the occupant is availing of rent a room, its npt like they are renting the property, Id say there are bigger things for revenue to go chasing than things which they already approve of.

You would say based on personal experience of dealing with Revenue or just unjustified ignorant opinion? Sounds like the latter.

As I said, calling rent a gift is idiotic. According to you two, revenue couldn't state the gift of free use of a house and an annual payment are in fact related?

Calahonda52

davindub wrote: »

You would say based on personal experience of dealing with Revenue or just unjustified ignorant opinion? Sounds like the latter.

As I said, calling rent a gift is idiotic. According to you two, revenue couldn't state the gift of free use of a house and an annual payment are in fact related?

Play the ball not the man. No need for personal attacks in here.

davindub

davindub wrote: »

You would say based on personal experience of dealing with Revenue or just unjustified ignorant opinion? Sounds like the latter.

As I said, calling rent a gift is idiotic. According to you two, revenue couldn't state the gift of free use of a house and an annual payment are in fact related?

You way of looking at this is arseways, you are going out of your way to drum reasons this can’t happen.

Going by your logic any two people with a financial connection to each other cannot avail of the small gifts exemption, yet the small gifts exemption is clearly open to all people and is a fundamental rule in irish taxation.

You cannot stop private individuals availing of a completely legal way of transferring money between each other. If a company tried to give their employee a 3k cash gift from a company account then that’s obviously nonsense and would not be eligible however if the owner of the company gave a 3k gift from his private account to an employee then that is totally above board.

No matter how much you want to you can’t invent a rule that excludes people from using the small gifts exemption, you appear to really want to but you can’t.

Saying person B can’t gift 3k to A because they are receiving rent is like saying I can't gift 3k to someone because it’s a way of transferring money from my employer to someone else. That’s the type of knots you are tying yourself in.

davindub

Alonso Big Cargo wrote: »

You way of looking at this is arseways, you are going out of your way to drum reasons this can’t happen.

Going by your logic any two people with a financial connection to each other cannot avail of the small gifts exemption, yet the small gifts exemption is clearly open to all people and is a fundamental rule in irish taxation.

You cannot stop private individuals availing of a completely legal way of transferring money between each other. If a company tried to give their employee a 3k cash gift from a company account then that’s obviously nonsense and would not be eligible however if the owner of the company gave a 3k gift from his private account to an employee then that is totally above board.

No matter how much you want to you can’t invent a rule that excludes people from using the small gifts exemption, you appear to really want to but you can’t.

Saying person B can’t gift 3k to A because they are receiving rent is like saying I can't gift 3k to someone because it’s a way of transferring money from my employer to someone else. That’s the type of knots you are tying yourself in.

No, the issue is whether the payment is case v income or a gift. The amount or source of the funds is not relevant.

davindub

davindub wrote: »

No, the issue is whether the payment is case v income or a gift. The amount or source of the funds is not relevant.

If the money is given as a gift then it's a gift. You have no way of proving it either way the same as with any gift given under the small gifts exemption.

Person B can gift person A 3k per year tax free full stop, take twist out of your knickers and move on.

Marcusm

Alonso Big Cargo wrote: »

One way to structure this while not having to pay tax is that you both own half the house, both pay half the mortgage and the person living there received 100% of the lodgers rent.

Then 3000 can be gifted per year tax free from the occupier to the other owner. It should cover most of their half of the mortgage, if the other owner has a partner/spouse then you can give them 6k per year tax free.

Lots of other ways to work this also but unfortunately they can't be discussed here.

You need to acquaint yourself with section 811C!

davindub

Alonso Big Cargo wrote: »

If the money is given as a gift then it's a gift. You have no way of proving it either way the same as with any gift given under the small gifts exemption.

Person B can gift person A 3k per year tax free full stop, take twist out of your knickers and move on.

Ah great, so you are now admitting tax evasion, just you think revenue can't prove that it is income rather than a gift?

Mrs OBumble

noxxy, you're smart at lots of things - but tax ain't one of them. And I say that knowing 9/10th of nothing about it myself.

If a property generates income, then legally that is income split between the owners of that property, divided backed on the ownership proportions. They have to pay tax on that income, based on their circumstances.

What the owners do with the cash after that is up to them, and may or may not have additional tax liabiliites (eg gift duty).

The question about getting 1/2 a house to live in for free is an interesting one. I have no idea how Revenue would weight up the relative value of this (eg should the resident-owner also be paying rent to the non-resident one) - vs the value of the 24x7 property management, maintenance and on-site security which they are providing. Suspect they might be regarded as cancelling each other out.

Mrs OBumble

Mrs OBumble wrote: »

noxxy, you're smart at lots of things - but tax ain't one of them. And I say that knowing 9/10th of nothing about it myself.

If a property generates income, then legally that is income split between the owners of that property, divided backed on the ownership proportions. They have to pay tax on that income, based on their circumstances.

Tax very much is one of them, particularly around CAT I know it inside out.

You are incorrect of course saying that the income is legally split, particularly when we are talking about rent a room as we are in this instance.

davindub wrote: »

Ah great, so you are now admitting tax evasion, just you think revenue can't prove that it is income rather than a gift?

I’m admitting nothing? Sure I am not involved in this situation at all. Revenue will be very very hard pressed to prove a 3k gift between co-owners/siblings is anything but a gift. Revenue won’t even have any interest in it, 3k gifts between private individuals that legally doesn’t have to be declared? What’s going to flag their interest?

And btw I’m not saying take a chance sure they won’t know, in my opinion I see no reason these two people cannot legally avail of the small gifts exemption, those saying otherwise are wrong imo.

Next you will tell me half my wedding presents were income or some other nonsense.

barneystinson

Alonso Big Cargo wrote: »

I’m admitting nothing?

Kinda pinned your colours to the mast here though...:pac::
https://www.boards.ie/vbulletin/showpost.php?p=110621116&postcount=18

Alonso Big Cargo wrote: »

Ha ha not a chance would I report anyone, I say fair play to them and anyone who saves themselves a few bob. The amount I’ve saved by paying cash in hand for rent or to trades peoples etc and other things here and there over the years is significant so I’m quids in on black market stuff rather than people “stealing :rolleyes:” from me.

I don’t know anyone in real life with this sort of attitude, everyone I know would say fair play to someone finding ways to pay less tax.

davindub

Alonso Big Cargo wrote: »

Tax very much is one of them, particularly around CAT I know it inside out.

You are incorrect of course saying that the income is legally split, particularly when we are talking about rent a room as we are in this instance.



I’m admitting nothing? Sure I am not involved in this situation at all. Revenue will be very very hard pressed to prove a 3k gift between co-owners/siblings is anything but a gift. Revenue won’t even have any interest in it, 3k gifts between private individuals that legally doesn’t have to be declared? What’s going to flag their interest?

And btw I’m not saying take a chance sure they won’t know, in my opinion I see no reason these two people cannot legally avail of the small gifts exemption, those saying otherwise are wrong imo.

Next you will tell me half my wedding presents were income or some other nonsense.

No proof is actually required, just the opinion of an auditor.

Your wedding gifts were presumably gifts? You didn't receive them in order to evade income tax presumably?

adam88

This escalated quickly, I’m sure this situation is not unique. There’s surely a lot of people that Are separated and own half the house with their ex etc and one person is left in the house while the other person moved out but still legally owns half. While the one that remains rents out a room. Not a million miles apart from my situation

barneystinson

barneystinson wrote: »

Kinda pinned your colours to the mast here though...:pac::
https://www.boards.ie/vbulletin/showpost.php?p=110621116&postcount=18

Nothing illegal in paying cash, it’s up to the recipient to look after their tax affairs.

barneystinson

Alonso Big Cargo wrote: »

Nothing illegal in paying cash, it’s up to the recipient to look after their tax affairs.

I knew that you would say exactly that. Fact remains you’re a willing participant in, and happy to facilitate, others’ tax evasion. That’s fine, just own it, don’t be trying to skirt around it like

davindub

adam88 wrote: »

This escalated quickly, I’m sure this situation is not unique. There’s surely a lot of people that Are separated and own half the house with their ex etc and one person is left in the house while the other person moved out but still legally owns half. While the one that remains rents out a room. Not a million miles apart from my situation

Some support orders are exempt from CAT.

Honestly get professional advice really, for the sake of a few hundred euros you will more than likely get a workable solution.