Claiming for rent paid query

[JasonKing]

Hi,

The "landlord" in this case, was my parents. I previously had a Rent Tax Credit which allowed me to claim for rent paid, through the PAYE system

since i became unemployed about 12 months ago, the payments have continued until i moved out but i havent claimed, until now

i can provide proof of payment i.e. Bank Statements etc. I just wonder what other documentation the authorities would require in this case

The other thing is this: the form (Rent1) states the following:

"Where Rent Relief is being claimed in respect of rent paid by a child to their parent, the parent will not qualify for the Rent-a-Room exemption and will be required to declare their Rental Income to Revenue at the end of the year"

like most cases where "rent" is paid to your mother/father while you are still living in the family home, the money went straight into their Bank a/c and was not declared to the Revenue

i'm a little concerned that if i make this claim, the Revenue will get in touch with my parents in some way, if they have not followed the letter of the law. If this is the case, I'd rather not go ahead with it at all...

If anyone has prior experience of being in my position with this claim, please let me know

 

[serotoninsid]

Rent relief is being phased out. When did you first move in?

 

[JasonKing]

I know that, yeah. It was pre-2010 so i am still eligible to claim, i believe

My real concern is if Revenue contact my parents and they end up having to pay some back tax on the rent they received

 

[mandelbrot]

Well the first question I'd ask is, did you pay rent or did you pay "rent"?

By which I mean, was what you were paying actually rent, or was it a contribution towards the cost of the groceries, household bills etc...

Obviously if you claim the tax credit, you are effectively flagging to Revenue the fact that your parents have an undeclared income source. Assuming they are in the tax net (i.e. working, earning and paying tax already) there's a good likelihood you'll cost them more money than you'll save yourself.

The relevance of the question I asked above is that if I were your parents, and Revenue came knocking, I'd simply say, nope that wasn't rent, it was money towards groceries, electricity, TV, gas etc... In which case Revenue may withdraw the credit they had granted you.

Bottom line is, someone has to lose out in this situation.

 

[JasonKing]

Thanks for that response..

Like i said, if my parents ended up getting hassled by Revenue because of this, i wouldnt go ahead with a claim. One of them retired recently and is now on a pension

Plus I don't want to fall out with them!

 

[Mrs Vimes]

The other thing is this: the form (Rent1) states the following:

"Where Rent Relief is being claimed in respect of rent paid by a child to their parent, the parent will not qualify for the Rent-a-Room exemption and will be required to declare their Rental Income to Revenue at the end of the year"

Basically, as you can see from the Rent1 you quoted, when a child is paying rent to their parents, they have to decide between them whether the child claims rent credit, or the parents claim rent-a-room relief.

As Mandlebrot said, you can claim it was living expenses rather than rent, but this would lose you the rent credit anyway. I don't think it's actually necessary since it's as easy for your parents to claim rent-a-room relief on the rent.

If the parents are paying tax at the higher rate then they will gain more tax relief from rent-a-room than you would from rent credit so it should be easy to decide which is more beneficial.