Rent Relief with Parents - Parents pay tax?

T

T_Virus

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Hi there,

I've used the search function this time :D My folks don't apply for any tax reliefs under the Rent-a-Room Scheme or anything, so my Dad said it to me today that perhaps I should apply for extra credits because I pay them some money every week for my room.

I read on the Revenue site that my folks will have to declare this income on their own returns and it'll be subject to tax at the standard rate but my Dad said the programme he was listening to on RTÉ outlined that this used to be what happened, but not anymore. Apparently he's under the impression that I get the Rent Relief credits and they don't get taxed..

Somehow I think he got his wires crossed in that parents used to be able to claim from the RaRS while the child claimed Rent Relief too until that was closed off in 2007.

Is the information on the Revenue site correct? Do I get the tax credits while he gets to pay tax on my rent because it has to be declared?

If that's the way it is I'll just continue paying upkeep and living rent free :D
 
Pretty sure you cant use rent a room scheme between parents and children for a start.
 
queenlex said:
Pretty sure you cant use rent a room scheme between parents and children for a start.
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You're right, you cant. That's how they stopped the children from claiming Rent Relief while Mam & Dad got their relief from the RaRS :)

That's not what I asked though, my parents never claimed anything from the RaRS (nor will they).

I asked if it's still the case that if I claim Rent Relief for paying them rent, that they'll get taxed on the rent income they legally must declare or is that rent exempt from tax like my Dad seems to think this Radio programme told him.
 
I think there may be a little confusion here. Perhaps your dad is talking about the Rent-a-room scheme in which he can receive rent of up to E10000 without having to pay tax on it. The other part of that is that the tenant can claim rent relief of up to E2000 @20%.

Unfortunately this is not allowed between parents and children living in the family home
 
Black Sheep said:
I think there may be a little confusion here. Perhaps your dad is talking about the Rent-a-room scheme in which he can receive rent of up to E10000 without having to pay tax on it. The other part of that is that the tenant can claim rent relief of up to E2000 @20%.

Unfortunately this is not allowed between parents and children living in the family home
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But the tax relief that a tenant can claim is separate to the rent-a-room scheme, no? Just because parents can't claim rent a room relief doesn't mean that the tenant/child can't claim rent relief if they are paying rent. I don't know the answer to the original query (sorry) but just wanted to raise the fact that the two can operate separately.
 
Revenue blurb on the issue here - it appears that the tenant/child *can* claim relief, even if the parent has to pay tax. OP, if you claim rent relief, than yes, you will be paying rent and, as such, your parents will have to pay tax on it.

Sprite
 
But the OP pointed out that she did not want to increase her parents tax bill. I am aware that both situations are not dependent on each other but can be operated together at "arms length"
 
Black Sheep said:
But the OP pointed out that she did not want to increase her parents tax bill. I am aware that both situations are not dependent on each other but can be operated together at "arms length"
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I'm a she now? When did that happen :p

Anyways, thanks very much for the posts folks - it definitely cleared it up for me.

Given my current income, I don't pay a whole heap of tax. It's sort of the reason why I'm living here at home and not out on my own. My parents on the other hand pay enough tax as it is, so I definitely don't want to go and claim rent relief when I know it's going to bump up their tax bill and there's a chance some of my Rent Relief credits won't even get used because of my own situation.

I'm going to leave it the way it is, the informal payment of upkeep definitely seems to be the way to go until I move out or get a better job :)
 
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