how would this rental income be tax free?- Joe pays James €10K per year for rent and house maintenance ( which nets off against the loan repayment)
Did not think of income tax on the rent . I want thinking of CAT ! My mistakehow would this rental income be tax free?
you need to work out what the arrangement is now.then we would come to another arrangement.
So I should be more specific. The tax owed on the estate is from a trust. Long story, but this trust was mismanged over years and the end result is that we owe a total trust tax including interest of about 140k. My brother is willing to pay the total trust tax owed, to clear the bill, in return for him having use of the property for the next 7 years. We would both still own the house 50/50you need to work out what the arrangement is now.
What exactly is the 70k for?
Is it a loan for you to pay the tax, and you owe the 70k back?
Or are you giving a share of the house in exchange, so you no longer own it 50/50?
Or is it advance payment of rent from your brother, you don't owe him anything and still own 50% in 7 years?
The house is very valuable .......
My brother is willing to pay the total trust tax owed, to clear the bill, in return for him having use of the property for the next 7 years. We would both still own the house 50/50
You definitely need to decide what exactly happens after 7 years. If your brother is living there and cant afford to buy you out, or indeed pay rent, (as you mentioned the house was valuable) it could get very complicated.So I should be more specific. The tax owed on the estate is from a trust. Long story, but this trust was mismanged over years and the end result is that we owe a total trust tax including interest of about 140k. My brother is willing to pay the total trust tax owed, to clear the bill, in return for him having use of the property for the next 7 years. We would both still own the house 50/50
Yes thats basically what it is. What I dont know is if thats a gift to me or what for tax purposesOr is it advance payment of rent from your brother, you don't owe him anything and still own 50% in 7 years?
Yes indeedDoes your brother qualify for the Dwelling House Exemption?
It sounds like it's rental income to me.Yes thats basically what it is. What I dont know is if thats a gift to me or what for tax purposes
well, for a start, it would be only 50% of total rent if the OP is joint ownerVery strange post with regard to value of house v rent? You say it's a very valuable house, yet the rental value is only just over €800 per month. Something not right in all of this? On top of that, there's Local property tax, insurance, possibly water, etc.
Rental income will be impacted by his brother living there. It is going from a property for rent to a room for rent. You can't rent it out to a family, just individuals looking for a house share.well, for a start, it would be only 50% of total rent if the OP is joint owner
The way I am thinking is that he owns half the house, and his brother the other half. so he is basically renting his half out to his brother, who then has the whole house ?Rental income will be impacted by his brother living there. It is going from a property for rent to a room for rent. You can't rent it out to a family, just individuals looking for a house share.