Rent relief & Maintenance

  • Thread starter Sophie R Starting Afresh
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Sophie R Starting Afresh

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Rent relief & Maintenance

I hope you can put me straight. I expect to take in two students earning me about five thousand extra in the year which I badly need. I'm in a student town. I can do so with an existing garage conversion, but I could borrow to build on top getting anoth five thousand, ie from 4 students instead of two.

How does Rent relief work? Will I pay tax - the rest of my income is PAYE 29,000 and child maintenance for my children of 17,000 from their father.I presume child maintenance isn't taxed or how does that work. Thanks a bunch.
 
This is what the Revenue say:

Rent-a-Room Relief
Where a room (or rooms) in a person’s sole or main residence is (are) let as residential accommodation, gross annual rental income of up to €7,620 is exempt from tax. Relief in respect of mortgage interest relief is not affected. The relevant Capital Gains Tax/Stamp Duty provisions are also not affected. For more information see Leaflet IT 70.

[You need to note that the 'rental' includes ALL payments made to you. For example if the lads pay €3,000 for the phone, tv, internet, laundry, massage etc.. and €5,000 in straight rent..the total is €8,000 and is outside the relief.

So: just be careful on how these services are paid for ..as when the garage goes up ..you might easily slip over the limit.]
 
Thanks

Thanks a lot, WizardDR that clarifies the relief, does anybody know the tax position on maintenance payments which I understand are, technically, payments to the kids????
 
Re: Thanks

I don't think maintenance payments for children are taxable.

Maintenance payments for a spouse can be taxable if the payer is claiming a deduction from their own income.
 
maintenance & tax

Maintenance payments for children are not taxable, nor can the payee claim tax relief on them. Tax relief can be claimed for spousal maintance paid under a court order; it is taxable income for the recipient. Don't forget you can claim additional tax relief as a lone parent (www.revenue.ie).
 
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