Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Tax implications of elderly mum moving in with us

Options
  • 31-03-2023 9:47pm
    #1
    Owlet
    Registered Users Posts: 100 ✭✭


    My mum was widowed last year and would like to sell her home and move in with us.

    She is in her 70s and her health is deteriorating.

    Two questions:

    1. If she were to move in with us, would she have to pay rent to keep things above board or is it fine not to charge rent from a tax point of view because she's living in our family home and not a separate property? (Obviously she may want to contribute to outgoings, bills etc which we could make an agreement on).

    2. From the proceeds of her house sale, can she fund renovations in our house to help accommodate her more comfortably? For example, there is a small bathroom she would use which could be extended and upgraded to make a more accessible wet room suitable for older people. Obviously we wouldn't be looking for her to remodel the whole house but how do you draw the line between her paying for something for her own benefit and it appearing to be a gift to us (e.g. if property value went up as a result) in the eyes of tax authorities?

    Very keen to do things above board to the benefit of my mum.

    I'm not sure if I am overcomplicating things or looking at it too simplistically!

    Thank you.



Comments

  • Options
    #2
    downtheroad
    Registered Users Posts: 2,764 ✭✭✭downtheroad


    1. No you don't have to charge her rent

    2. If she pays for renovations to your property that could be considered a gift. You say us so assuming you have a spouse, she could gift you each €3,000 towards the cost of the renovations and it would be free of tax (small gift exemption).

    If she moves in with you she should make sure to sell her home within 12 months so that there is no capitals gains tax (CGT) issue with her change of principal private residence. She won't owe any CGT on the sale of her home.

    Also she can gift you and your spouse that €3,000 each annually so as not to eat into your Category A inheritance threshold (if she wants to).

    If you pay for a carer for her there is tax relief available on that cost.



Advertisement