Gift from daughter to parents

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Black Sheep

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My friend lives in her parents house (not the family home) and pays reduced rate of rent. As the mortgage is now cleared could she pay a gift E3000 each year to her parents in lieu of rent and so reduce their tax bill and could this be paid in monthly instalments
 
Black Sheep said:
My friend lives in her parents house (not the family home) and pays reduced rate of rent. As the mortgage is now cleared could she pay a gift E3000 each year to her parents in lieu of rent and so reduce their tax bill and could this be paid in monthly instalments
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I'm not an expert on this, but I think the tax exemption only applies when the owner is living in the same house (i.e. in this case it would have to be the family home).

I stand to be corrected....
 
I'm not sure what tax emption you mean. As this house is rented to her by her parents she is wondering if she could give them a gift instead of rent
 
Any person may give €3,000 each year Tax free to A.N.Other as a gift, regardless of relationship.
 
So on the tax return should rental income be declared as say E1000 (4000 - 3000). Would that appear strange from the revenues point of view - a sudden drop in rental
 
Tell me if I have the scenario :

  • Your friend rents an investment property from her parents
  • This is not their PPR
  • They do not live there with her
  • They are registered as landlords with the PRTB
  • They want to evade tax on the rental income.
 
mathepac said:
Tell me if I have the scenario :

  • Your friend rents an investment property from her parents
  • This is not their PPR
  • They do not live there with her
  • They are registered as landlords with the PRTB
  • They want to evade tax on the rental income.
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I think the OP is trying to find out if it would be tax evasion or if it would be tax avoidance, something many of the great and good of this fair land do on a regular basis and something which is legal.

So do you know?
 
They can charge her no rent at all if they wish, and that is common in family situations.

However, allowing someone to live rent free or for reduced rent in a property is a gift and my be liable to CAT depending on the relationship. The value of the gift is calculated annually as being the value of the rent that would have been paid for a similar property on the open market. When the value year on year exceeds the threshold amount, Gift tax will become due.

Either way, whether the daughter gifts the E3,000 to the parents or not, if she is paying little or no rent, the rent foregone is still a gift from her parents. Revenue seem to have it sussed.
 
askalot said:
I think the OP is trying to find out if it would be tax evasion or if it would be tax avoidance, something many of the great and good of this fair land do on a regular basis and something which is legal...
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I could think a lot of things.

What I am trying to establish is whether I am interpreting correctly OP's original and supplementary posts.
askalot said:
... So do you know?
Click to expand...
No - do you?
 
This is not the parents PPR, it was purchased by them many years ago when daughter and siblings were college students to accomodate them while they were students. Over the years the other siblings have moved on into their homes and abroad. This daughter has remained on and continues to pay rent to cover the mortgage. Mortgage is now cleared but she wishes to continue to pay her way.

All rental income has always been declared to revenue through all the years.

There is absolutely no intention of tax evasion. Daughter is simply wondering if there is any way she could help to reduce her parents tax bill

To 4th estate: I take your point about reduced rent already being a form of gift. I hadn't thought of that
 
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