Oldies return to Ireland and rent supplement

ZMonkeynutZ

ZMonkeynutZ

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So my wifes parents are returning to Ireland as they can no longer survive abroad. They have no nest egg and no plan, they are pretty old at this stage so you can imagine the stress on them has been formidable.
My wife and I do have an investment apartment that we have had vacated (a good thing as the tenant had pretty much trashed it) and we are currently in the process of refurbishing this apartment. We are putting in accessible bathroom etc. to cater for the inlaws needs.
Our plan is to move them into the aparment asap and get them set up with their state pensions, at the moment their only income is his contributory state pension. The issue we have is that we cannot afford to maintain the mortgage for long after they move in. So we are considering a rental agreement. This should allow them get rent suplement to cover the cost of the rent. The rent will be reduced of course as we just need to cover the running costs of the place.
Just looking for some advice on the best way to handle this;
Should we put the rental agreement in place as soon as they move in?
Can we put a stay on the rental agreement for say 6 months while they get settled (we can budget for this)?
Will they get rental suplment when renting from a relative?
TIA for any information
Rgds
 

How to qualify for Rent Supplement​



You are only eligible for Rent Supplement if you are a genuine (bona fide) tenant and meet one of the following conditions:

  • You were getting Rent Supplement in the 12 months before the date of your application.
  • You were living in private rented accommodation for at least 6 months (183 days) of the last 12 months, you could afford the rent at the beginning of your tenancy and you are unable to continue to pay the rent because of a substantial change in your circumstances which occurred after you started renting. You can combine time living in more than one rented accommodation to satisfy the 6 months (183 days).
 
ZMonkeynutZ said:
no nest egg and no plan, they are pretty old at this stage
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No wish to be disrespectful to your in-laws, but they must have had a plan to move abroad in the first place.

Have they literally zero assets? Do they have a private (not state) pension? Where were they living? Rental?

Sorry re-read yr post & see they have state pension only.

I'll keep the rest of my thoughts to myself on the planning or lack thereof, it wouldn't be helpful.

In your shoes, I would relet the apartment and, if you have surplus, gift it to your inlaws to supplement their income.
 
Hi all,
Thanks for considering our position.
They have no income apart from his contributory pension.
They made some really bad plans and decisions during their retirement, but thats all pretty irrelevant at this stage. They are renting abroad and have zero assets apart from a car, but that will have to go. Returning to Ireland will at least give them two pensions and hopefully a suitable place to live out their years. We are just looking for a way to do this without loosing out too much.
I appreciate there's no guarantee that they would get rent supplement as they are related to us, but on the other hand we would not be charging anywhere near the market rate.
If they don't get rent supplement then we don't really have any option but to absorb the costs ourselves.
I believe that if we don't collect rent on the apartment and it is inhabited by family, then we at least can claim it as a primary residence against cgt in the future. Thats about the only thing we can get from it according to an Irish Times article.
Its a bit of a pickle of a situation, but at least we can do something for them.
Rgds
 
ZMonkeynutZ said:
I believe that if we don't collect rent on the apartment and it is inhabited by family, then we at least can claim it as a primary residence against cgt in the future. Thats about the only thing we can get from it according to an Irish Times article.
Click to expand...
Sorry, but you may need to re-read that article. You seem to be interpreting the article as meaning that you, personally, can have more than one PPR. This is absolutely not the case. You can have one and only one PPR. The sale of any residential property other than your PPR will be subject to CGT.
 
cremeegg, i think you are correct in that is the way forward regardless of how much rent we actually collect. The apartment was caught in an rpz with rent well below the current market rate. So it will remain at that +2% or whatever we are allowed which will still be below the market rate. I know there was some discussion recently on allowing rents caught in this situation to be brought up to market value before applying the limits, but im not sure how far that went.
Mathepac, I know what you mean, ill need to dig it up again but this is not a concern at the moment. I believe the article stated that the property would have the same tax status as your ppr for cgt purposes if you are not changing rent for a close relative. Ill check up on that though.
We are not resident in Ireland which makes organising all of the a ton of fun as you can imagine.
 
mathepac said:
The sale of any residential property other than your PPR will be subject to CGT.
Click to expand...
That's not necessarily correct. Dependent Relative Relief, where applicable, can allow for PPR style full CGT relief on a non PPR. See section 11 here:

No 39 of 1997, Section 604, Revenue Note for Guidance

No 39 of 1997, Section 604, Revenue Note for Guidance
www.charteredaccountants.ie
I have no idea if it would be applicable in this case though. Even if it is, it won't wipe out any eventual CGT liability in relation the periods when the property was already rented out. If you're considering making plans that depend on this relief you should probably get professional advice.
 
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Getting entangled in your in-laws affairs would be a very poor decision in my view.

As you have already mentioned, there's been poor judgement already & now you are getting sucked in as well.

By all means help them move / pack / find somewhere to live.

But don't put them into your apartment.

Call me cynical, but how much of the decision to return to Ireland was influenced by the knowledge your apartment was vacant.
 
Nor did I, @ClubMan.

The 2 grounds I meant were that the Dependent Relative exemption is available only in limited circumstances (IIRC involving a parent who is widowed or incapacitated by old age or disability) and where they are not charged rent.
 
FYI - I had reason to contact a county council in the west of ireland to ask:

If a parent of an adult child qualifying for HAP were to rent a non-PPR to their child; is that allowed under the scheme?

To my surprose, the answer I got was "Yes provided the rental agreement is bona fide"; which was explained as: 1) Must be a seperate property (no granny flats etc) and 2) must charge a market rent (IE no parental subsidy). Also subject to other normal rental governances; RTB, income tax etc.

I did not get it in writing as I have not progressed that option . So my 2 cents is to not assume that you cannot be landlords to relatives who qualify for HAP. I am not commeting on the overall wisdom. That's your call.
 
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