benefit in kind if use of land given to family member

[littlefinger]

I've been put into a fluid situation where a parent needs urgent care - which has led to a scramble to figure out how the cost of that care can be covered.

Parents are on non-contributory pension. They have farm and PPR/house.

First of all, on the farm if they rent this directly to someone and receive payment, my understanding is that this income would come off the top of their non-contributory pension, making it pointless. What happens in a scenario where they gave use of farm to a son/daughter and they turned around and rented it out, paid tax as normal on that income (and would then choose of their own will to put whatever is left towards the cost of in-home care?

I guess I have the very same question with regard to their PPR/house. May have to put in a modular home beside their PPR to meet care needs. Was thinking they could both live there and rent out their old house. The same issue would arise. i.e. if they do that directly then no benefit as it would mean a deduction from their non-contributory pension. If the use of this PPR was given to a son or daughter without payment and they rented it out and paid tax on it, is there any type of benefit in kind issue?

 

[ClubMan]

Parents are on non-contributory pension.

First of all, on the farm if they rent this directly to someone and receive payment, my understanding is that this income would come off the top of their non-contributory pension, making it pointless.

The means test is outlined here:

State Pension (Non-Contributory)

The State Pension (Non-Contributory), previously called the Old Age Non-Contributory Pension, is a means-tested payment for people in Ireland aged 66 and over.

www.citizensinformation.ie

What happens in a scenario where they gave use of farm to a son/daughter and they turned around and rented it out, paid tax as normal on that income

Was thinking they could both live there and rent out their old house.

They would still be the beneficial owners of the farm and PPR in these cases which may have implications for their means tested payments and tax liabilities.

You may need professional advice on these matters.

 

[Peanuts20]

Contact your local Teagasc office, they have someone who will be able to assist with advice.

In terms of leasing, bear in mind that farm income should have been included in the original means test so leasing may not be as bad as you think

Means test

To get a social assistance payment, you must pass a means test. A means test examines all your sources of income. However, some income is not taken into account.

www.citizensinformation.ie

How income from farming is assessed​

If you or your spouse, civil partner, or cohabitant are getting income from working a farm, the DSP assesses the yearly value to you (this is gross income minus expenses). If the land is worked but is not being worked to its potential, then they will make an estimate of the potential net yearly value.

If you are leasing a farm you own, your rental income is assessed.

If you are not working or leasing a farm, the capital value of your land is assessed.

 

[ClubMan]

benefit in kind if use of land given to family member

...

If the use of this PPR was given to a son or daughter without payment and they rented it out and paid tax on it, is there any type of benefit in kind issue?

I don't really understand the reference to benefit in kind here and wonder if you actually meant something else?

 

[littlefinger]

I don't really understand the reference to benefit in kind here and wonder if you actually meant something else?

So what I was proposing is that the elderly parent give the use of the land/house to a son/daughter - and they then rent them out rather than the parent, paying tax on that income as normal. So it would be filed by the son/daughter in their own tax return - but they would use the proceeds to contribute towards care for the parent. I wondered if there would be some implication for giving the use of the land/house for free...

 

[ClubMan]

What's the purpose here? To retain the means tested non-contributory pension? Sounds like welfare fraud to me.