Principal property

conormc1984

Hi all. Have recently separated and back living in my apartment while my ex is in the family house with the kids.

I plan to let a room out in the apartment and my ex plans to do the same to a room is the house..

My PPR is currently the family home and I am wondering how do I change it to the apartment.

Is there anything else we need to do so that we can avail of the rent a room scheme.

Thank you all in advance

Grumpypants

Give revenue a buzz. I don't think you actually set the PPR. But it's just where you live for X days a year.

DFB-D

https://www.boards.ie/discussion/2058259573/principal-property

If your query is related to capital gains You can nominate a PPR with Revenue.

You and your spouse cannot nominate 2 PPRs, so you will need to wait until officially separated.

For rent a room relief, you cannot claim on both properties, again once formally seperated, this will be an option.

Phone Revenue (or raise the query online with them).

You & your spouse are entitled to be individually assessed for tax purposes, so there should be no problem having separate PPR's. You'll obviously need to move all your other paperwork (bank accounts) to your apartment as well, and show the bills in your name. It shouldn't be an issue I would expect, although evidence is likely to be required.

Formal separation could take several years depending on how things go. It's difficult to see Revenue ignoring the reality of you both living apart until either a separation agreement is signed or a judge grants the separation order— it would be difficult to believe that your situation is unique.

DFB-D

https://www.boards.ie/discussion/comment/119506004#Comment_119506004

The entitlement for seperate assessment to income tax is always there, whether married or not.

The issue arises on the treatment of a PPR/ ROR where the OP may still have an interest in the family home and the spouse an interest in the apartment.

Always worth a try I suppose....

Lots of people have interests in more than one residential property.

If there's clear evidence that they're actually (even if not yet legally) separated and are living apart (ie, they're not taking the p1ss to try & reduce CGT liability and avoid income tax on the rented room) there's no reason why Revenue would disregard that evidence.

DFB-D

https://www.boards.ie/discussion/comment/119506439#Comment_119506439

Yes but per married couple there can be only 1 PPR / claim ROR on one property.

Living apart does not mean completely separate finances, the money from ROR pays down the loan etc.

Anyway, the above is from actual experience!

Without prying, is that actual experience of being separated in fact but not yet with a separation agreement/judicial separation? And Revenue refused to allow each of you designate a principal residence until one or the other was produced? That seems unreasonable.

Unless the "etc" part of the not completely separate finances included joint accounts, some household bills being in one name some in the other, some in joint names, some bank statements going to one one place and other bank statements going to another.

Because if I was in Revenue and someone was saying to me:

"We're separated, but we still have both of our names all over the utility bills & a couple of joint accounts as well and I haven't bothered changing the address with my bank/credit union/ driver license to where I actually live now, but this property is my principal private residence and this other property is their principal private residence and therefore we should both get the benefit of rent a roof relief & also be exempt from CGT"

then that would raise some giant red flags that the people in question had had a bright idea on how they could extract €14k a year in rent without paying a penny in income tax while also banking some serious savings on CGT down the line. I'd say that situation comes up fairly regularly...

DFB-D

https://www.boards.ie/discussion/comment/119511233#Comment_119511233

It's professional experience, so not my own, but I have discussed the ROR with other professionals and Revenue.

I get the gist of what you are saying, and it is on point, but when there is joint property involved, it gets more complicated.

Even if seperate finances are being maintained, the marital assets have yet to be legally divided and up to the point of the DOS, transfers between the parties can take place without CAT/CGT. So wife could nominate PPR, sell the house and husband could do the same claiming partial relief, transfer all of the cash to the wife or vice versa without further liability to CGT.

This is resolved when the assets are assigned in the deed of seperation.

Same with ROR, it generates assets within the marriage, so if it were allowed to claim ROR by both spouses, they could earn 28k tax free and transfer between them.

Joint property (including the family home) is always a nightmare when a relationship breaks down. Even in the best case scenario (amicable split + no mortgage + quick agreement on finances) there's still a bundle of paperwork to be completed which will (very optimistically) take months to get across the line.

But my experience of Revenue (and to be fair most of the public service as a service user) is that they are generally reasonable enough— just as long as you don't take the p1ss too much (rule #1). I would consider the scenario you're describing (where both parties are getting the benefit of rent-a-room, CGT relief, etc while there's a free-flow of cash/assets between them) as breaking rule #1.

I think Revenue will look at the reality— presumably maintenance is being paid at a set rate, and a mediated agreement (as distinct from a legally binding separation agreement) could be produced quickly (if it doesn't already exist) setting out the intended terms of the separation. With a mediated agreement and a bunch of evidence to support it, Revenue are (in my view) highly likely to look favourably on the reality that a separating couple has 2 principal private residences.

Even if the OP and his other half are fighting like cats in a sack with solicitors at 10 paces and intend to continue their marriage by other means for the next half decade or so (which is regrettably common), they should at bare minimum be able to produce a solicitor's letter or two confirming the fact of 2 separate PPR's and relationship breakdown.