Friend poss incorrectly advised re clawback and renting

H

Harlequin

Registered User
Messages
81
Friend advised by solicitor that she can rent out her whole one-bed apt (purchased by her as FTB as her PPR) under Rent a Room Scheme after buying a new PPR, without being subject to stamp duty clawback by Revenue.

Don't think this is correct advice?

(Altered original question after answer received - removed possible identifying information)
 
Last edited:
Hi,

Your friend has been incorrectly advised.

The rent-a-room scheme only applies to owner occupiers.

Stamp Duty clawback will apply if they rent the property & the rents will be liable to Income Tax.

Revenue have also launched an audit review of properties where the owners are claiming the Rent a room relief and not living in the property, so I would be wary of going down that road.

Who wants an interest & penalties bill on top of any Stamp Duty & income tax bill!!
 
If your friends do not rent out the apartment until they have owned it for 5 years there will be no claw back of stamp duty. They can then rent it out as an investment property. The would be better advised to leave it empty until the 5 years are up.
 
"She and her husband have been informed by their solicitor"

This one always worries me - a solicitor is NOT a tax advisor, and although a lot of solicitors know a lot about tax one should go to a tax advisor for tax advice.

Would you ask your Tax Advisor for Legal advice?
 
Oh dear. That's what I thought - for once, I'm sorry to be right!

Stronge - that's what I thought they would do until they got this advice! Leaving it empty for the year would be tough financially but clawback of stamp duty would be worse.

Domo said:
"She and her husband have been informed by their solicitor"

This one always worries me - a solicitor is NOT a tax advisor, and although a lot of solicitors know a lot about tax one should go to a tax advisor for tax advice.

Would you ask your Tax Advisor for Legal advice?
Click to expand...

That's exactly what I thought when she told me. If I was told something like that, I would at least check it with Revenue to make sure everything's above board. Maybe she'll check with Revenue anyway and will find out the truth without me having to steel myself to let her know. I don't think I could just let it lie - if they got caught by Revenue, I'd feel so guilty!

Thank you all for your help. :)
 
Harlequin said:
If I was told something like that, I would at least check it with Revenue to make sure everything's above board. Maybe she'll check with Revenue anyway and will find out the truth without me having to steel myself to let her know. I don't think I could just let it lie - if they got caught by Revenue, I'd feel so guilty!
Click to expand...

As a matter of policy, Revenue do not give advice. Sometimes their officials will be happy to volunteer their opinion on a subject during a meeting or over the phone. This is not the same thing. You should never assume that information given by Revenue will (1) be correct; or (2) stand up in your friend's favour if it is found to be deficient in the event of a future investigation or audit.
 
Thanks ubiquitous. I wasn't aware of that.

So is the only way to make sure you understand your tax liabilities and pay everything you have to pay talking to a tax advisor?

Sorry, I think I'm veering away from the original point of the post, but I'm curious. :eek:
 
You must log in or register to reply here.
Back
Top