Tax implications of repaying a loan from a family member by forgiving rent obligation

[tomwa]

I have a 5-bed principal home I've owned for 16 years with rent-a-room tenant in three rooms and income from rent-a-room just under the €14k limit.
I've been gifted a property this CAT year (in December 2022) from my father valued in December at €335k, and this year my dad has also loaned me an additional €335k towards another property which will become my new primary home.
The arrangement between me and my dad is that he will lease my original home from me ( market rent is €2k/month in that area for a 4/5bed ), it will be his new primary residence and the in-situ rent-a-room tenants will pay him. He'll then lease his original home to his existing rent-a-room tenant with a standard residential lease and report that as income on his Form 12 (his tax liability would be ~€2k/annum).
Ideally I'd like to just not receive rent from him and reckon the €2k/month+€3k annual CAT exemption as repayments against the principal + interest of the €335k loan.
Is that something I can do? Or do I have to report and pay tax on the notional €2k/month rent?

 

[WizardDr]

1. You will lose the Rent a Room Relief and your father will get that - according to Revenue despite no tax on RaR you actually have to 'claim' the relief which would have meant filing a tax return. Father would not be able to claim rent relief because of relationship with you.
2. Market rent applies between you and your father. His letting of his former PPR is rent and is returnable.
3. His loan to you is the rate of return the funds would have got if they were invested -that is a gift to you.
4. Don't see an issue using the €3k exemption presumably to reduce the loan except for 3 above.