Hi,
My mother has dementia and instead of us continuing to hire a full time carer for her she is going to come and live with me and my family. As I will have to be with her 24/7 and won’t be able to work it has been agreed that she will pay me for this. I am looking to find out what the most tax efficient way to do this is.
What I am thinking is –
She will pay rent to me under the rent a room scheme
She will gift me money of €3,000 a year.
She will also gift €3,000 a year each to my husband and 2 children.
Are there any rules around how cash gifts from grandparent to grandchild can be used? It will likely be necessary for the 6,000 she will be giving my children under the above plan to be used to pay for their education, holidays, presents and household bills. Is this above board?
I need to maximise the amount that my mother can give me and in the long run this is significantly cheaper (and better) for her than hiring a third party to live with her in her house.
My husband will have my tax credits but I believe that the €1650 PAYE Tax Credit is not transferrable so I would like to take advantage of this too if possible. As this will be my only income would she be able to pay me €8250 a year and use my tax credit to discount the tax payable on this (8250 @ 20% = 1650)? Can PAYE tax credit be used if it means that you don’t have to pay any PAYE tax?
I assume I would also need to pay PRSI. Would that mean 8250 x 4% = 330 per year?
I don’t want my mother to have to file a tax return because of it so what is the best way to do this? I assume this would be to set up as self employed.
If I only earn the €8250 a year that in the above calculation is free from income tax would I be exempt from USC as my income is under €10,036 even though my husband will be working?
I really appreciate any help you can give me on this. I have never done anything like this before so am totally new to working out tax.
My mother has dementia and instead of us continuing to hire a full time carer for her she is going to come and live with me and my family. As I will have to be with her 24/7 and won’t be able to work it has been agreed that she will pay me for this. I am looking to find out what the most tax efficient way to do this is.
What I am thinking is –
She will pay rent to me under the rent a room scheme
She will gift me money of €3,000 a year.
She will also gift €3,000 a year each to my husband and 2 children.
Are there any rules around how cash gifts from grandparent to grandchild can be used? It will likely be necessary for the 6,000 she will be giving my children under the above plan to be used to pay for their education, holidays, presents and household bills. Is this above board?
I need to maximise the amount that my mother can give me and in the long run this is significantly cheaper (and better) for her than hiring a third party to live with her in her house.
My husband will have my tax credits but I believe that the €1650 PAYE Tax Credit is not transferrable so I would like to take advantage of this too if possible. As this will be my only income would she be able to pay me €8250 a year and use my tax credit to discount the tax payable on this (8250 @ 20% = 1650)? Can PAYE tax credit be used if it means that you don’t have to pay any PAYE tax?
I assume I would also need to pay PRSI. Would that mean 8250 x 4% = 330 per year?
I don’t want my mother to have to file a tax return because of it so what is the best way to do this? I assume this would be to set up as self employed.
If I only earn the €8250 a year that in the above calculation is free from income tax would I be exempt from USC as my income is under €10,036 even though my husband will be working?
I really appreciate any help you can give me on this. I have never done anything like this before so am totally new to working out tax.