# Tax relief for paying parents weekly



## bluetoff

I have heard the rumour but I am not too sure if there is any truth in this. Are you entitled to tax credits,and have them  backdated if you have been handing up a weekly wage to your parents if living at home. If so how do I claim, or under what section does this tax credit come under.


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## zag

I don't know the answer to that, but the flip side of getting the reliefs would be that your parents would most likely be liable to tax on the newly declared income.

z


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## ClubMan

And _PRSI_?


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## Itchy

Maybe be rent relief is what you are thinking about. Remember that your parents should declare any Rent-a-Room income even if it is under the threshold, So submitting the Rent 1 form could highlight this to the revenue. Just be aware of the implications.


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## jpd

Are we talking about a payment under a covenant ?

You would get tax relief on that and if your parents income is under the exemption limits they wouldn't be liable for income tax ?


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## bazermc

bluetoff said:
			
		

> weekly wage to your parents if living at home..


 
do you mean rent?

if so you may be entitled to a rental credit (currently 2006 of max €330) you may only go back 4 years to 2003 however


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## deem

as already stated your parents will have to declare this, however the rent a room relief is much higher than the tax credit, so unless your parents are renting rooms to more than three people it could work out ok, unless of course the rent is very expensive.


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## momomo

deem said:
			
		

> as already stated your parents will have to declare this, however the rent a room relief is much higher than the tax credit, so unless your parents are renting rooms to more than three people it could work out ok, unless of course the rent is very expensive.


 
Has anybody done this?
Would my parents have to declare it even if i keep it under the level?
And would there own income affect this?

Sorry for all the questions, just really dont understand how this works


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## Satanta

*Has anybody done this?* 
Not to my knowledge but I'm sure if you look hard enough you'll find someone who has done pretty much anything/everything.

*Would my parents have to declare it even if i keep it under the level?* 
Yes. Keeping it under the threshold just means that they aren't liable for any tax on the money, they must still declare to remain tax compliant. Lots of info on the rent a room scheme available on AAM and 

*And would there own income affect this?* 
Their eligibility for the rent a room scheme? 
No. Check out the official details on RaRS for full information on all requirements/conditions. 
I'm not sure if thats what this question was in relation too though so feel free to clarify if referring to something else.

Remember if you do go this way to claim the additional Rent Allowance (additional tax credits) available to you as mentioned above.


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## momomo

Satanta said:
			
		

> *Has anybody done this?*
> Not to my knowledge but I'm sure if you look hard enough you'll find someone who has done pretty much anything/everything.
> 
> *Would my parents have to declare it even if i keep it under the level?*
> Yes. Keeping it under the threshold just means that they aren't liable for any tax on the money, they must still declare to remain tax compliant. Lots of info on the rent a room scheme available on AAM and here.
> 
> *And would there own income affect this?*
> Their eligibility for the rent a room scheme?
> No. Check out the official details on RaRS for full information on all requirements/conditions.
> I'm not sure if thats what this question was in relation too though so feel free to clarify if referring to something else.
> 
> Remember if you do go this way to claim the additional Rent Allowance (additional tax credits) available to you as mentioned above.


 
Thanks for your reply Satanta
I stil feel its a bit dodgy, because why isnt everybody claiming it if there isnt any issues.
When asking has anybody done this? I meant any AAM users, just to know their experience of it.
So from my understanding of your reply, If my parents declare it, it wont affect their tax position.


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## Satanta

*why isnt everybody claiming it if there isnt any issues?*
Well, most don't pay rent to parents so it'd be tax evasion in this case and a serious offence (although the only gain is the €330 rent allowance gained). Also, the real reason I'd assume, most don't know about it.

*When asking has anybody done this? I meant any AAM users, just to know their experience of it.*
True, I also would be interested to hear if it has been done. 
It is a lot of work for a gain of €330. (Careful trying to claim back years if you did previously pay rent. Your eligible to claim back for 4 years, but your parents were not under the RaRS so may be liable for costs on those years)

*So from my understanding of your reply, If my parents declare it, it wont affect their tax position.*
As long as they stay under the RaRS threshold level then yes (from my own understanding of it. Happy to admit I've no personal experience, but read all the documents on it and it _appears_ quite clear and obvious).


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## momomo

Thats my problem with it, it seems so clear, that i feel there is an underlying catch


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## liteweight

I believe that most working, adult children, still living at home would contribute something to the household. Here's hoping anyway!! Whether this would qualify as rent or not is another question, I would have thought it was more to do with food/bills etc.

It is a question that has crossed my mind. If a parent applies for the rent a room scheme and the child pays under the threshold then what's the harm in the child getting tax credits for it? However, I'd assume that Revenue have that one covered. Interesting though.


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## momomo

Thats what i was wondering do the revenue have this covered.
Id love to know, dont want to apply for this if there is a catch somewhere hidden.


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## ClubMan

liteweight said:
			
		

> It is a question that has crossed my mind. If a parent applies for the rent a room scheme and the child pays under the threshold then what's the harm in the child getting tax credits for it? However, I'd assume that Revenue have that one covered. Interesting though.


As far as I know it's perfectly legitimate for parents to claim rent a room relief and the child to claim the rent tax credit as long as the transactions are above board.


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## Satanta

liteweight said:
			
		

> If a parent applies for the rent a room scheme and the child pays under the threshold then what's the harm in the child getting tax credits for it? However, I'd assume that Revenue have that one covered. Interesting though.


I don't see why they would need to have this "covered". Technically the parents own the house, the tenant (in this case their child) is living in the house and is paying rent.... 
If it were a niece, nephew or friend of the family the system would allow it, I can't see why the same would not apply to their own child (that's far from saying that it *IS* allowed, since when does logic apply to these matters ).

I have never seen any document which states that it can't be done. The [broken link removed] does list some items not allowed (rent to LAs or SAs for over a lease over 50 years) but nowhere mentions children's contributions to parents. 

If you are concerned about it before taking any action you could query it with citycentrepaye@revenue.ie. They should be able to give you official confirmation of whether it is available or not.


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## momomo

thanks for all your help
i will contact them and post back here with the answer


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## Madilla

Just one catch which comes to mind is if your parents are in receipt of a means tested social welafre benefit any income they are receiving from you would be counted as means and possibly reduce their payment


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## dubmick

I've been thinking of this for a while.  Anybody get any feedback from the revenue?


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## ClubMan

_Revenue _will most likely just point you at the rules/guides rather than giving advice. If you need advice contact an accountant or tax advisor. I'm neither but believe that it's all perfectly legitimate once the transactions are above board and are not being returned to the "tenant".


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## tml

just an update on this one, I rang the revenue who confirmed that as I pay my parents rent I am entitled to claim rent relief, and they are covered tax wise under the rent a room scheme as the rent I pay them is under the threshold

I backdated my claim to 2002 and have received a tax refund of €1050 so Im chuffed!!!


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## liteweight

tml said:


> just an update on this one, I rang the revenue who confirmed that as I pay my parents rent I am entitled to claim rent relief, and they are covered tax wise under the rent a room scheme as the rent I pay them is under the threshold
> 
> I backdated my claim to 2002 and have received a tax refund of €1050 so Im chuffed!!!



What position does it leave your parents in? Are they liable in any way, or were they already registered for the Rent a Room Scheme?? If not, what is their position now? Are they in trouble for receiving rent and not declaring it?


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## ClubMan

You don't "register" for the rent a toom scheme but you do have to file returns in respect of the rent a room income even if, assuming that it's below €7,620, is tax free. Did your parents do this?


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## liteweight

ClubMan said:


> You don't "register" for the rent a toom scheme but you do have to file returns in respect of the rent a room income even if, assuming that it's below €7,620, is tax free. Did your parents do this?



I asked if they registered for rent a Room?  File a return is actually what I meant. They can do it this year but not as far back as the OP claimed??


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## roxy

liteweight said:


> I asked if they registered for rent a Room? File a return is actually what I meant. They can do it this year but not as far back as the OP claimed??


 
You can claim back as far as April 01. 50 Euro a week is the max that you can claim it on. I know people that have claimed and received various amounts depending on how how they've been working. My boyfriend claimed earlier in the week and the said the cheque will be out within 10 days. They estimated it to be in the region of 2000 Euro. Not bad eh?


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## momomo

and do your parents have to declare this to the tax man?


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## tml

No my parents did not file tax returns in previous years in relation to this, but they are in the process of doing this now and will not be liable for any tax as the rent they received each year was under the €7620 threshold


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## roxy

momomo said:


> and do your parents have to declare this to the tax man?


 

Not up to €7620. You do need your parents PPS numbers though but it doesn't affect them at all. They confirmed it with the Revenue before he went up with the form. He had to physically hand it in himself to them.


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## Satanta

tml said:


> No my parents did not file tax returns in previous years in relation to this, but they are in the process of doing this now and will not be liable for any tax as the rent they received each year was under the €7620 threshold


Can RaRS be claimed in such a manner? I've never heard of this (or read of it) before.



roxy said:


> You do need your parents PPS numbers though but it doesn't affect them at all.


Technically the form asks for a PPS number but, I'm guessing as a result of some landlords refusing to give it, Revenue will process it with just the contact details of the landlord and no PPS.


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## momomo

Oh thats brilliant roxy
and I claim back to 2001?


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## roxy

momomo said:


> Oh thats brilliant roxy
> and I claim back to 2001?


 
Yes just from April though. Mad isn't it, I mean why is everyone not doing it? One guy I know of only worked a summer job last year and got nearly €400 back from them. Every little helps!


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## roxy

Satanta said:


> Technically the form asks for a PPS number but, I'm guessing as a result of some landlords refusing to give it, Revenue will process it with just the contact details of the landlord and no PPS.


 
Yes I'd say you're right there, it just seems to be a technicality.


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## momomo

Whats the name of the form again?
Ill print it off asap for myself and my brother.
Yea strange how everybody isnt doing it


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## Satanta

momomo said:


> Whats the name of the form again?
> Ill print it off asap for myself and my brother.
> Yea strange how everybody isnt doing it


 
Links to the form and all the details are on this thread already.

Details including warnings about claiming for years that parents didn't submit the additional income to revenue. The Rent A Room Scheme makes it tax free, but to be tax compliant it must be declared. I've yet to see anything which says you can apply for Rent a Room for previous years! Do get a clarification from Revenue that your parents applying for RaRS back to 2001 is ok, I have my doubts. Also, technically, it is tax evasion if you have not been paying rent during the time you claim.


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## momomo

Satanta said:


> Links to the form and all the details are on this thread already.


 
Sorry bit overexcited. 

Thanks for all the info


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## roxy

momomo said:


> Whats the name of the form again?
> Ill print it off asap for myself and my brother.
> Yea strange how everybody isnt doing it


 
Yep print them off and actually go into the Revenue with them completed. Remember you'll have to half the €7620 allowance with your brother you can't both claim to have paid such an amount. 

Or you could keep it for yourself and tell him you got lucky on a horse


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## roxy

Satanta said:


> Links to the form and all the details are on this thread already.
> 
> Details including warnings about claiming for years that parents didn't submit the additional income to revenue. The Rent A Room Scheme makes it tax free, but to be tax compliant it must be declared. I've yet to see anything which says you can apply for Rent a Room for previous years! Do get a clarification from Revenue that your parents applying for RaRS back to 2001 is ok, I have my doubts. Also, technically, it is tax evasion if you have not been paying rent during the time you claim.


 
It really is ok Satanta, they checked it all out with Revenue first. We had doubts too but it's all good, honestly.


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## liteweight

roxy said:


> You can claim back as far as April 01. 50 Euro a week is the max that you can claim it on. I know people that have claimed and received various amounts depending on how how they've been working. My boyfriend claimed earlier in the week and the said the cheque will be out within 10 days. They estimated it to be in the region of 2000 Euro. Not bad eh?



Sorry Roxy...I meant the parents couldn't back date tax returns! I know we can usually claim back tax up to 4 years. Correct me if I'm wrong but I thought it was illegal not to file a return if you've been in receipt of money, not whether tax was due on it or not??

If this is the case, then the parents failed to make returns ...would any action be taken on this by Revenue???


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## momomo

roxy said:


> Or you could keep it for yourself and tell him you got lucky on a horse


 
Oh i could never be that mean , emm what will I spend all that money on....me me me!!!


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## roxy

liteweight said:


> Sorry Roxy...I meant the parents couldn't back date tax returns! I know we can usually claim back tax up to 4 years. Correct me if I'm wrong but I thought it was illegal not to file a return if you've been in receipt of money, not whether tax was due on it or not??
> 
> If this is the case, then the parents failed to make returns ...would any action be taken on this by Revenue???


 
Not sure on this liteweight, I get confused by that kind of thing  All I know is the Revenue told his mum that it was perfectly ok to go ahead with it, they would not be hit for anything.


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## roxy

momomo said:


> Oh i could never be that mean , emm what will I spend all that money on....me me me!!!


 
Good for you, well get it done ASAP and let us know what you get!


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## liteweight

roxy said:


> Not sure on this liteweight, I get confused by that kind of thing  All I know is the Revenue told his mum that it was perfectly ok to go ahead with it, they would not be hit for anything.



Oh God...if I had a euro for every time someone in the Tax Office has told me to go ahead...only to be told the next week..definitely not.... It'll be very interesting to see if others got the same reply from the Taxman and even then to see what happens at a future date!!


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## momomo

do you have to fill in a seperate form for each year?


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## tml

I also told the revenue that my parents did not file the tax returns for the previous years as they did not realise that they had to, so could they file them now back to 2002, they said to download Form12 from the revenue website for each year and send them in together.

I was a bit suspicious about the whole thing too so I rang the revenue a couple of times to double check and was told the same thing each time so it seems to be ok!!!


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## roxy

momomo said:


> do you have to fill in a seperate form for each year?


 
No my boyfriend just wrote, 01, 02, 03, and so on.


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## ClubMan

roxy said:


> Not up to €7620.


I don't think that this is correct. While rent a room scheme income up to €7,620 is tax free it still must be declared as far as I know. The above suggests that it doesn't even have to be declared. I think that this is incorrect.


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## liteweight

ClubMan said:


> I don't think that this is correct. While rent a room scheme income up to €7,620 is tax free it still must be declared as far as I know. The above suggests that it doesn't even have to be declared. I think that this is incorrect.



You're right Clubman, the income does have to be declared. People on the thread seem to think the Taxman will simply accept failure to make a return in the appropriate year(s). I've never heard of this before and it certainly hasn't been my experience. Ignorance is no excuse etc. etc......

Also, will receiving 'rent' from children affect certain parent's rights to benefits, e.g. claiming unemployment/disability or in fact, anything that's means tested?


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## roxy

ClubMan said:


> I don't think that this is correct. While rent a room scheme income up to €7,620 is tax free it still must be declared as far as I know. The above suggests that it doesn't even have to be declared. I think that this is incorrect.


 
Hmm, maybe you're right. I'm sure someone will clarify it, I'm just telling you what the Revenue told us. His parents didn't have to sign anything though or fill in any seperate form. Just PPS number on Rent1 form.


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## ClubMan

_Revenue _can and do make mistakes. They dispense information and not advice. If they make mistakes then they will not accept this as a defence against making an incorrect return. If in doubt get independent, professional advice when assessing liabilities and making returns. Far too many people who post here on _AAM _are in danger of making incorrect decisions based on incomplete or inaccurate information which could cost them. Especially when it comes to rental issues.


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## liteweight

roxy said:


> Hmm, maybe you're right. I'm sure someone will clarify it, I'm just telling you what the Revenue told us. His parents didn't have to sign anything though or fill in any seperate form. Just PPS number on Rent1 form.



He's definitely right Roxy. They will have to file a return from now on...at the very least!!


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## tml

Just to clarify what I have been told to do by the Revenue.

Rent received under the rent a room scheme MUST be declared to the revenue by parents, however if thus far they have failed to declare this income they can now do so by completing a Form 12 for the years 2002, 2003, 2004 and 2005.

Once the rent received is less than the threshold of € 7620 per annum they will NOT be liable for any tax.

My parents will be sending these forms into the Revenue next week, I will post back any response they get from the Revenue


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## ClubMan

roxy said:


> You can claim back as far as April 01


Are you sure about that? I thought that one could only backdate claims for the previous four tax years which would be the calendar years 2005, 2004, 2003 and 2002 and not extending back to any part of 2001. Note that 2001 was the last tax year that started in April before the alignment of the tax and calendar years starting in 2002. Thus it was also a "short" tax year (April-December 2002). However I believe that it is beyond the four year cut off point now that we are in the 2006 tax year.


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## liteweight

tml said:


> Rent received under the rent a room scheme MUST be declared to the revenue by parents, however if thus far they have failed to declare this income they can now do so by completing a Form 12 for the years 2002, 2003, 2004 and 2005.
> 
> Once the rent received is less than the threshold of € 7620 per annum they will NOT be liable for any tax.




So they definitely have to file a return from now on...that's a given. I already realised that they wouldn't have to pay tax...the question is:- are there any penalties in law for not filing a tax return for the previous years, even if they didn't owe tax?

Also are other benefits which might be received by some parents affected by the Rent A Room Scheme? I think people should check these things out before all in sundry rush to fill in the form.

In the cases mentioned so far on the thread, it doesn't seem to matter as parents are in agreement but for others dipping into this forum at a future date, there may well be implications??


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## ClubMan

roxy said:


> Yes just from April though. Mad isn't it, I mean why is everyone not doing it? One guy I know of only worked a summer job last year and got nearly €400 back from them. Every little helps!


In my experience (e.g. see here) one should (well *must*!) always keep _Revenue _update with any changes in circumstances that affect earnings and tax etc. and might want to request a _P21 _balancing statement each year to make sure that one's tax affairs are up to date. I like to think that I understand a bit about personal taxation in general and my own in particular and yet somehow ended up in a situation in which I was owed over €2,800 in tax refunds over the past three tax years even after thinking that I had made sure to keep my single and then married credits/allowances up to date, reclaimed any tax/_PRSI_/health levy relief (e.g. on pension contributions) along the way, checked my payslips and caught mistakes by my employers etc. etc.


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## liteweight

ClubMan said:


> Are you sure about that? I thought that one could only backdate claims for the previous four tax years which would be the calendar years 2005, 2004, 2003 and 2002 and not extending back to any part of 2001. Note that 2001 was the last tax year that started in April before the alignment of the tax and calendar years starting in 2002. Thus it was also a "short" tax year (April-December 2002). However I believe that it is beyond the four year cut off point now that we are in the 2006 tax year.



Again, correct!! Perhaps the poster applied for 2001 but was only reimbursed from 2002 and didn't notice???


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## roxy

liteweight said:


> He's definitely right Roxy. They will have to file a return from now on...at the very least!!


 
I stand corrected. As I said I'm not too up to scale on the legalities of these type of things, just passing on info that was given to me. They haven't been sent any such forms as yet, maybe they'll come out with the cheque? Perhaps tml might confirm it for me. I really thought it was 6 April 2001 but I'll find out for sure when it comes out.


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## tml

I was told also that you could only backdate claims as far as 2002.

I agree that Parents should check that this income does not affect any other means tested benefits they may be claiming ( not necessary in my parents case)

I was also told by the Revenue that there would be no penalty for not filing the tax returns in previous years as the amount involved is under the threshold so there is no outstanding tax due on it.


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## xeresod

You can claim back until 2002 only, so your parents need not worry about making returns for years prior to 2002. 

All they need to do is submit a Form 12 with details of the rent-a-room income on it (and at the same time claim any additional credits or reliefs they may due for those years) to their own tax office. 

To be fully compliant in the future, just ensure they submit their Form 12 by the 31st of October of they year following (i.e., 2006 return to be submitted no later than 31/10/07). 

When you submit your own claim be sure to request that the credit is added for this year too.

The maximum amount of rent allowable for the credit is as follows:

2002, 2003 & 2004 €1270 @ 20% = €254 credit
2005 €1500 @ 20% = €300 credit 
2006 €1650 @ 20% = €330 credit


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## roxy

xeresod said:


> You can claim back until 2002 only, so your parents need not worry about making returns for years prior to 2002.
> 
> All they need to do is submit a Form 12 with details of the rent-a-room income on it (and at the same time claim any additional credits or reliefs they may due for those years) to their own tax office.
> 
> To be fully compliant in the future, just ensure they submit their Form 12 by the 31st of October of they year following (i.e., 2006 return to be submitted no later than 31/10/07).
> 
> When you submit your own claim be sure to request that the credit is added for this year too.
> 
> The maximum amount of rent allowable for the credit is as follows:
> 
> 2002, 2003 & 2004 €1270 @ 20% = €254 credit
> 2005 €1500 @ 20% = €300 credit
> 2006 €1650 @ 20% = €330 credit


 
Excellent, great info thanks a mill


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## liteweight

Thanks for the link Setanta. So basically if parents are receiving payments from social welfare or any means tested supplements, the rent a room scheme payments are included as income. But they do not effect the Old Age (Non Contributory) Pension or the Widows Pension.


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## ClubMan

liteweight said:


> But they do not effect the Old Age (Non Contributory) Pension


I would not have thought so. Generally _PRSI _linked benefits would not be affected by additional income while means tested ones would be. Isn't it the case that the _Old Age (Contributory) Pension _is _PRSI _linked while the _Old Age (Non-Contributory) Pension _is means tested? As such I would have expected the latter to be potentially affected by additional income whereas the former would not once one has the required _PRSI _contributions.


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## liteweight

I would have thought so too Clubman but if you check out the Oasis site, it says it doesn't affect the Old Age (Non Contributory) Pension.

Slightly off topic but relevant nevertheless...I was wondering why someone in receipt of unemployment benefit is not given a rent allowance if they are living at home, while people paying rent to parents are allowed to claim tax relief? Why is it not considered a legitimate expense in the former, but legitimate in the latter?

Is this just an anomaly or is my logic flawed?


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## ClubMan

liteweight said:


> .I was wondering why someone in receipt of unemployment benefit is not given a rent allowance if they are living at home, while people paying rent to parents are allowed to claim tax relief? Why is it not considered a legitimate expense in the former, but legitimate in the latter?


Presumably because in the latter case the individual is incurring a rental expense while in the latter they are not. Why should somebody who is not incurring rental expenses get the allowance?


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## liteweight

ClubMan said:


> Presumably because in the latter case the individual is incurring a rental expense while in the latter they are not. Why should somebody who is not incurring rental expenses get the allowance?



If one pays rent to one's parents, I presume it's considered a legitimate expense because, as can be seen from this thread, one gets tax credits.

If one then becomes unemployed...why aren't the same parents still entitled to rent from the child? The are still considered a tenant aren't they? Nothing has changed except the adult child is unemployed and unable to pay!


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## ClubMan

liteweight said:


> If one then becomes unemployed...why aren't the same parents still entitled to rent from the child?


Who says that they are not?


> The are still considered a tenant aren't they? Nothing has changed except the adult child is unemployed and unable to pay!


Who says that they are necessarily unable to pay? _Unemployment Benefit_ is not means tested so the claimant could have significant savings from which they could pay rent.


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## liteweight

The point is that when someone who does NOT live at home is unemployed they are entitled to Rent Allowance on top of the unemployment benefit.

Someone who is unemployed and living at home is not entitled to this Rent Allowance even though they may pay their parents rent.

Presumably if tax credits are given to someone paying rent to parents then Rev. consider the parents to be landlords. Why aren't they considered landlords if the child becomes unemployed?

Their ability to pay out of savings etc. is not the question.


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## ClubMan

liteweight said:


> Someone who is unemployed and living at home is not entitled to this Rent Allowance even though they may pay their parents rent.


Sorry - if that is explicitly stated somewhere as an exclusion then I agree that it's a bit odd.


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## ClubMan

liteweight said:


> The point is that when someone who does NOT live at home is unemployed they are entitled to Rent Allowance on top of the unemployment benefit.


If that is explicitly stated somewhere then it does seem odd alright.


> Presumably if tax credits are given to someone paying rent to parents then Rev. consider the parents to be landlords. Why aren't they considered landlords if the child becomes unemployed?.


 I'm a bit confused now - are you talking about Rent Allowance or Rent [income tax] Relief for Private Rented Accommodation?


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## ubiquitous

As someone with considerable day-to-day experience of personal tax issues including dealing with Revenue on behalf of clients, I would urge readers to exercise extreme caution before acting on some of the patently reckless advice above. 

Making a tax return is a serious matter and one should be very careful to advise anyone, least of all their own parents, to file a tax return unless everyone concerned  properly understands the implications based on their own circumstances. 

Patterns of backdating form 12 tax returns for earlier years, and claiming tax benefits on the basis of unverified transactions between related parties, as recommended above, may well lead the Revenue to treat all such applications as "artificial tax avoidance" - in which case they may disallow any tax benefit arising and raise assessments for recovery of these sums plus interest and penalties. 

There are other potential legal and tax implications and expert professional advice is recommended at the very least before involving oneself in any sort of wheeze of this nature.


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## liteweight

ClubMan said:


> If that is explicitly stated somewhere then it does seem odd alright.
> 
> I'm a bit confused now - are you talking about Rent Allowance or Rent [income tax] Relief for Private Rented Accommodation?



Rent Allowance. If someone is unemployed they are entitled to receive this if paying rent to a landlord. Granted my understanding of this issue is limited, but I really wanted someone to clarify the situation. Just seems like an anomaly to me although that's not unheard of in tax law!! Other threads suggest that the receipt of unemployment benefit practically 'forces' one out of the parental home in order to receive this allowance. Just curious!


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## liteweight

ubiquitous said:


> As someone with considerable day-to-day experience of personal tax issues including dealing with Revenue on behalf of clients, I would urge readers to exercise extreme caution before acting on some of the patently reckless advice above.



As someone with very little experience, I would urge the same! 




			
				ubiquitous said:
			
		

> Patterns of backdating form 12 tax returns for earlier years, and claiming tax benefits on the basis of unverified transactions between related parties, as recommended above, may well lead the Revenue to treat all such applications as "artificial tax avoidance" - in which case they may disallow any tax benefit arising and raise assessments for recovery of these sums plus interest and penalties.



I presume it's within their power to do this. I am very wary when told by 'customer service' types in Revenue that a certain course of action is acceptable. Backdating returns, even if there's no liability, does not seem like a good idea to me. What if Revenue looks for proof? My own eldest has recently started work and has set up a standing order to my account for a small amount per month. Prior to that, she sometimes had extremely well paying part time jobs and used to hand me cash. I have no record of these payments.

If it is legally possible for her to claim tax credits then I'll encourage her to do so. I don't see why she should miss out simply because I'm not a 'stranger'.


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## Satanta

Revenue said:
			
		

> Can rent allowance be claimed by a tenant where the relief applies?
> 
> Where the facts and circumstances are such that Section 473 applies the rent allowance may be claimed. In the case of payments made by children in respect of the family home it is Revenue’s view that, in general, such payments are not rent within the meaning of section 473.


[broken link removed]

Just came across this one.
Still in £'s so very dated, but still given as reference on the Revenue site.


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## liteweight

Satanta said:


> [broken link removed]
> 
> Just came across this one.
> Still in £'s so very dated, but still given as reference on the Revenue site.



So where does this leave everyone who have been told by Revenue that they are entitled to claim?


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## jfitzer

Revenue stance on this a few years back was that rent paid to parents was not considered rent as pointed out in TB.  Their stance now is that it is acceptable as it qualifies under rent a room scheme but the parent must claim the exemption to this Case V income by completing a tax return.  Althought this is their present stance they have not issued any statement of practice or detailed this on any TB yet but watch this space as I dare say it will be detailed on a TB shortly.


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## jfitzer

*Budget 2007* 

*Rent-a-Room Scheme*
From 1 January 2007, it is proposed to close off use of the Rent-a-Room Scheme where the rent received is from connected persons who in turn are claiming rent relief.


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## liteweight

jfitzer said:


> *Budget 2007*
> 
> *Rent-a-Room Scheme*
> From 1 January 2007, it is proposed to close off use of the Rent-a-Room Scheme where the rent received is from connected persons who in turn are claiming rent relief.




Grossly unfair. Can they still claim for 2006?


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## jfitzer

Whether or not it will be passed is another thing. I know that some of the Revenue officies were refusing such claims for 2005 and previous years as they based their decision on what the Revenue statement whereby such rent was not considered rent for the purpose of tax relief. 

However in saying that, by bringing this into the budget bit like an indirect statement to say that such rent was OK for rent relief purposes albeit not in the form of a statement but based on practice so imo 2006 should be ok but parents will have to complete income tax returns to claim the Rent-a-Room exemption. I also know that they have written to many parents asking them to complete income tax returns for the years in which they gave rent relief. 

Suppose they still have to define who is clasified as "connected persons".

The plot thickens!!


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