Renting a room in my own house for business

[ang1170]

Agreed. If it walks like a duck, quacks like a duck.....

He mightn't want to call it rent, but that's what it is, and as such it's income and subject to tax at the marginal rate.

It's quite different from taking on a share of ESB or Eircom bills, where the company is simply paying the expense direct to a provider. Come to think of it, that's taxed too (indirectly through the provider's corporation tax).

Maybe what the Revenue mean is there's no problem with the company paying the expense, and claiming it as such, but I'd definitely want it in writing if you think they're telling you that you can avoid treating it as (personal) income for the property owner.

 

[room305]

FillSpectre's setup must be wrong and I think he knows this, hence his defensiveness. I just hope he genuinely has taken professional advice and has it in writing to aid his defence. You cannot have your cake and eat it. If nothing else, it would make the rent-a-room scheme redundant. Why bother renting under the threshold when you can set up a private company, lease the room to the company (which may even be in the business of sub-letting) and enjoy income tax free rental with no threshold.

Funnily enough my brother informs me he is just after dealing with a relatively similar query where someone was planning on running a business from their PPR. They were wondering about TRS and when he looked into it he judged that it wouldn't be allowed because it would need to be apportioned. He suggested reviewing s.244 of the Taxes Consolidation Act. He also stressed that to claim it as a business expense you will need to inform your lender as it will probably violate the terms of your loan agreement if you don't. You would need to pay rates as well.

 

[gonk]

I would agree with this opinion. This is why I don't really understand how FillSpectre thinks this is some sort of tax-saving plan. I don't see any tax benefit whatsoever except perhaps in very limited cases where a company director earns so little that they are tax exempt - in which case they would probably be subject to automatic Revenue Audit for that reason.

It might be, if the OP has other rental properties which are generating a nett loss after interest and other allowable expenses. These losses could be offset against the rental income from the home office, leaving it tax exempt.

 

[ubiquitous]

Again this would make sense in the short-term but (unless he is expecting never, ever to make rental profits) hardly in the long-run. This would amount to getting a 12.5% corporation tax break for the company by sacrificing a loss forward that should eventually generate a 20%/41% income tax break for himself.

 

[Purple]

Fill..... You're wrong mate.

LOL
That about sums it up