I would not have thought so. Generally PRSI linked benefits would not be affected by additional income while means tested ones would be. Isn't it the case that the Old Age (Contributory) Pension is PRSI linked while the Old Age (Non-Contributory) Pension is means tested? As such I would have expected the latter to be potentially affected by additional income whereas the former would not once one has the required PRSI contributions.
Tax relief for paying parents weekly
- Thread starter bluetoff
- Start date
liteweight
Registered User
- Messages
- 1,678
I would have thought so too Clubman but if you check out the Oasis site, it says it doesn't affect the Old Age (Non Contributory) Pension.
Slightly off topic but relevant nevertheless...I was wondering why someone in receipt of unemployment benefit is not given a rent allowance if they are living at home, while people paying rent to parents are allowed to claim tax relief? Why is it not considered a legitimate expense in the former, but legitimate in the latter?
Is this just an anomaly or is my logic flawed?
Slightly off topic but relevant nevertheless...I was wondering why someone in receipt of unemployment benefit is not given a rent allowance if they are living at home, while people paying rent to parents are allowed to claim tax relief? Why is it not considered a legitimate expense in the former, but legitimate in the latter?
Is this just an anomaly or is my logic flawed?
Presumably because in the latter case the individual is incurring a rental expense while in the latter they are not. Why should somebody who is not incurring rental expenses get the allowance?.I was wondering why someone in receipt of unemployment benefit is not given a rent allowance if they are living at home, while people paying rent to parents are allowed to claim tax relief? Why is it not considered a legitimate expense in the former, but legitimate in the latter?
liteweight
Registered User
- Messages
- 1,678
If one pays rent to one's parents, I presume it's considered a legitimate expense because, as can be seen from this thread, one gets tax credits.
If one then becomes unemployed...why aren't the same parents still entitled to rent from the child? The are still considered a tenant aren't they? Nothing has changed except the adult child is unemployed and unable to pay!
Who says that they are not?
Who says that they are necessarily unable to pay? Unemployment Benefit is not means tested so the claimant could have significant savings from which they could pay rent.
liteweight
Registered User
- Messages
- 1,678
The point is that when someone who does NOT live at home is unemployed they are entitled to Rent Allowance on top of the unemployment benefit.
Someone who is unemployed and living at home is not entitled to this Rent Allowance even though they may pay their parents rent.
Presumably if tax credits are given to someone paying rent to parents then Rev. consider the parents to be landlords. Why aren't they considered landlords if the child becomes unemployed?
Their ability to pay out of savings etc. is not the question.
Someone who is unemployed and living at home is not entitled to this Rent Allowance even though they may pay their parents rent.
Presumably if tax credits are given to someone paying rent to parents then Rev. consider the parents to be landlords. Why aren't they considered landlords if the child becomes unemployed?
Their ability to pay out of savings etc. is not the question.
Sorry - if that is explicitly stated somewhere as an exclusion then I agree that it's a bit odd.
If that is explicitly stated somewhere then it does seem odd alright.
I'm a bit confused now - are you talking about Rent Allowance or Rent [income tax] Relief for Private Rented Accommodation?
ubiquitous
Registered User
- Messages
- 3,782
As someone with considerable day-to-day experience of personal tax issues including dealing with Revenue on behalf of clients, I would urge readers to exercise extreme caution before acting on some of the patently reckless advice above.
Making a tax return is a serious matter and one should be very careful to advise anyone, least of all their own parents, to file a tax return unless everyone concerned properly understands the implications based on their own circumstances.
Patterns of backdating form 12 tax returns for earlier years, and claiming tax benefits on the basis of unverified transactions between related parties, as recommended above, may well lead the Revenue to treat all such applications as "artificial tax avoidance" - in which case they may disallow any tax benefit arising and raise assessments for recovery of these sums plus interest and penalties.
There are other potential legal and tax implications and expert professional advice is recommended at the very least before involving oneself in any sort of wheeze of this nature.
Making a tax return is a serious matter and one should be very careful to advise anyone, least of all their own parents, to file a tax return unless everyone concerned properly understands the implications based on their own circumstances.
Patterns of backdating form 12 tax returns for earlier years, and claiming tax benefits on the basis of unverified transactions between related parties, as recommended above, may well lead the Revenue to treat all such applications as "artificial tax avoidance" - in which case they may disallow any tax benefit arising and raise assessments for recovery of these sums plus interest and penalties.
There are other potential legal and tax implications and expert professional advice is recommended at the very least before involving oneself in any sort of wheeze of this nature.
liteweight
Registered User
- Messages
- 1,678
Rent Allowance. If someone is unemployed they are entitled to receive this if paying rent to a landlord. Granted my understanding of this issue is limited, but I really wanted someone to clarify the situation. Just seems like an anomaly to me although that's not unheard of in tax law!! Other threads suggest that the receipt of unemployment benefit practically 'forces' one out of the parental home in order to receive this allowance. Just curious!
liteweight
Registered User
- Messages
- 1,678
As someone with very little experience, I would urge the same!
ubiquitous said:
I presume it's within their power to do this. I am very wary when told by 'customer service' types in Revenue that a certain course of action is acceptable. Backdating returns, even if there's no liability, does not seem like a good idea to me. What if Revenue looks for proof? My own eldest has recently started work and has set up a standing order to my account for a small amount per month. Prior to that, she sometimes had extremely well paying part time jobs and used to hand me cash. I have no record of these payments.
If it is legally possible for her to claim tax credits then I'll encourage her to do so. I don't see why she should miss out simply because I'm not a 'stranger'.
liteweight
Registered User
- Messages
- 1,678
So where does this leave everyone who have been told by Revenue that they are entitled to claim?
Revenue stance on this a few years back was that rent paid to parents was not considered rent as pointed out in TB. Their stance now is that it is acceptable as it qualifies under rent a room scheme but the parent must claim the exemption to this Case V income by completing a tax return. Althought this is their present stance they have not issued any statement of practice or detailed this on any TB yet but watch this space as I dare say it will be detailed on a TB shortly.
liteweight
Registered User
- Messages
- 1,678
Whether or not it will be passed is another thing. I know that some of the Revenue officies were refusing such claims for 2005 and previous years as they based their decision on what the Revenue statement whereby such rent was not considered rent for the purpose of tax relief.
However in saying that, by bringing this into the budget bit like an indirect statement to say that such rent was OK for rent relief purposes albeit not in the form of a statement but based on practice so imo 2006 should be ok but parents will have to complete income tax returns to claim the Rent-a-Room exemption. I also know that they have written to many parents asking them to complete income tax returns for the years in which they gave rent relief.
Suppose they still have to define who is clasified as "connected persons".
The plot thickens!!
However in saying that, by bringing this into the budget bit like an indirect statement to say that such rent was OK for rent relief purposes albeit not in the form of a statement but based on practice so imo 2006 should be ok but parents will have to complete income tax returns to claim the Rent-a-Room exemption. I also know that they have written to many parents asking them to complete income tax returns for the years in which they gave rent relief.
Suppose they still have to define who is clasified as "connected persons".
The plot thickens!!