Moving son into rental property-gifting rent

Discussion in 'Property investment and tenants' rights' started by Colby, Oct 7, 2018.

  1. Colby

    Colby Frequent Poster

    I have a property which previously generated rental income but now I want to let my son and his wife live rent free there for couple of years as the try save for their own.
    Question can my wife and I each ‘gift’ them 3k in rent ie total €12k so there is no tax liability for any party.
    Am I right in thinking if this can’t be done the couple would have a benefit in kind type liability or similar.

    what implications would this have on future rentals in rent pressure area?

  2. circularrd

    circularrd Registered User

    Interesting question.. I'm no expert but suggest the following. I do think you can gift to each of them as you suggest.

    Gift them the 12K max allowable at the start of the period, lodge same to an account from which they then pay 1K rent monthly leaving zero balance at end of year. Repeat as necessary.

    Regarding your RPZ query, if 1K monthly rent is below market rent for you area, then it would have negative implications for future rent increases/resale values bearing in mind the 4% cap limitation. Media comments on the rental cap being exceeded by landlords would suggest otherwise.

    The couple may have BIK liability for the difference between market rent and 1K charged.

    To what extent either of the above are monitored, I don't know and if in doubt do seek expert advice.

    Good luck!
  3. AlbacoreA

    AlbacoreA Frequent Poster

    What did you mean by this?
  4. Seagull

    Seagull Frequent Poster

    It comes down to number crunching, and you may well need a professional to get a clear answer. You will still pay tax on the rent. How does that compare to what they would pay in BIK living rent free? I suspect long term it will be easier if you just let them live there rent free. That way any tax implication falls on them rather than you. It also has the advantage that you aren't impacting the rent you can ask in the future, which could be the case if you charged them a low rent.
  5. moneymakeover

    moneymakeover Frequent Poster

    3k per year per child

    I don't think daughter in law qualifies?

    I don't think your wife can add another 3k
  6. Nutso

    Nutso Frequent Poster

    Isn't it 3k per year to anyone?
  7. Markel

    Markel Registered User

  8. moneymakeover

    moneymakeover Frequent Poster

    Ah right I get it

    Two adults can gift 6k each to any two others = 12k
  9. cliqueentour

    cliqueentour Registered User

    If u give a couple 3000 each and my wife does likewise. That's 12000.

    And instead if charging them 1000 a month in rent, we in theory gift them the 1000. Is there a tax liability for me or the couple?

    I don't want to know peoples personal opinions, just rather the answer.