Advice please - NOT claiming rent tax credits.

Hi all,
I would appreciate some advice and if possible answers to the following.
My sister has been renting a house with her boyfriend from his aunt. She has always claimed her tax credits but this year, Revenue want all details of the landlord before she can process her MED1 / MED2 claims.

She pays 75euro rent per week (boyfriend pays 75e also) - total 150e p/w

Salary: 34K per year
PAYE Tax credit: 1830
Personal tax credit: 1830
Rent tax credit showing: 2000

Rent payable in tax year: 3,900
Net wages per week: 524.42e.

His aunt is elderly and as far as I am aware does not declare this income (I know the issues here!)

My questions:
(a) Will revenue demand a payment from the aunt because of this income if declared?
(b) Is the rent tax relief refunded directly to my sister in cheque form. If so how much would she expect?
(c) If she doesnt claim her rent tax credits, how will this affect her weekly wages next year? (if at all).

I really would appreciate any clarification and help on this.. thank you.

Plek Trum said:

My questions:
(a) Will revenue demand a payment from the aunt because of this income if declared?
(b) Is the rent tax relief refunded directly to my sister in cheque form. If so how much would she expect?
(c) If she doesnt claim her rent tax credits, how will this affect her weekly wages next year? (if at all).

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(a) in time they may get around to looking for a income tax return regarding the rental income.
(b) €400 - actually nil refund as you have said the rent tax credit in your current tax credits.
(c) single person claiming rent relief will pay about €8 less in tax per week.

So €8 a week (or €16 between the couple) to shop in the aunt. It's a small price to pay to keep the aunt from destitution from having to pay income tax on rent received.

Plek Trum said:

His aunt is elderly and as far as I am aware does not declare this income (I know the issues here!)

Click to expand...

She's probably tax-exempt anyway.

So I'm right in thinking that
(a) She is due a cheque for 400e from Revenue if she claims her tax credits
AND / OR

(b) her wages will reduce from 524e approx to 516 p/w if she doesnt?

Hard to tell. I would imagine that her aunt is in trouble all the same, at least until/unless she proves that she is tax-exempt.

Okay - many thanks for your help, appreciate it!

Question is

(a) She is due a cheque for 400e from Revenue if she claims her tax credits

NO.

Check her certificate of tax credits, if the tax credit of €400 is there already there will be no refund. On payslip weekly credit will be €78 approx with rent credit or €70 without. I suspect that it is already being claimed as the person running up the MED1 refund is looking for verification that the Rent Credit is due before repaying the MED1 claim - they must be busy