Swiching tax

Swiching tax

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Hi,

I own a property but rent it out. I want to rent my mother's spare flat for me to live in. Can I do this without both of us paying tax on the rental income?

I don't think I can simply allocate my flat's income to her unfortunately but that's effectively what I'd like to do. And I'm pretty sure that I can't offset my rent expenses against my rental income.

Thanks very much

Anthony

Replies (12)

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By cheekychappy
17th Apr 2015 13:47

No

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RLI
By lionofludesch
17th Apr 2015 14:20

No

Might be what you want but it's disastrous from a tax point of view.

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By neileg
17th Apr 2015 14:44

Not hard, surely

Your mother can allow you to live rent free in her flat. You can make a gift to your mother out of your income which could be similar to the rent that would be charged to a third party for the flat. You pay tax on your rental income. Your mother doesn't have a taxable rental income. Does that work?

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Replying to Carolynne:
By Bungo
17th Apr 2015 16:42

agree

Stapes55 wrote:

Thanks for your advice but isn't that just tax evasion? I'm not trying to cheat, I just thought that there might be a legal way of not paying tax twice as a family. Anyway, I think this might have bothered the first two respondents so I'll remove the post.

Thanks for everyone's help.

Agree that suggestion sounds a bit iffy.

But what do you mean "not pay tax twice as a family".  If you and your mum both had employment income I am sure you wouldn't be asking if there was some way you could avoid the pair of you paying tax? 

I am sure you know that your personal rent / mortgage would not be a tax deduction, so that definitely doesn't change because you are paying it to your mum. 

Of course there is one way to avoid both paying tax, live in your own flat and let your mum rent hers out to someone else. 

 

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By neileg
17th Apr 2015 15:44

Do you really think that?

Would HMRC find a mother giving her son rent free accomodation unusual? Is it unusual for a son to give his mother cash?

I think you are being rather pedantic, Tim.

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Replying to denise.poulter:
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By duncanedwards
17th Apr 2015 15:56

Smell test

neileg wrote:

Would HMRC find a mother giving her son rent free accomodation unusual? Is it unusual for a son to give his mother cash?

I think you are being rather pedantic, Tim.

I think he's giving sensible advice. There is obviously a grey area somewhere in this but paying a regular "gift" magically equivalent to the market rent doesn't really pass the smell test, does it?

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Replying to denise.poulter:
By Tim Vane
17th Apr 2015 16:09

Pedantic?

neileg wrote:

I think you are being rather pedantic, Tim.

It is exactly the same advice I would give if he were my client. I couldn't see myself defending that position with a straight face if HMRC came a-calling.

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Replying to paul.benny:
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By neileg
17th Apr 2015 16:53

Your choice

Tim Vane wrote:

neileg wrote:

I think you are being rather pedantic, Tim.

It is exactly the same advice I would give if he were my client. I couldn't see myself defending that position with a straight face if HMRC came a-calling.

Perhaps that part of the reason I no longer have an accountancy practice and prefer to work in less rarified circumstances.
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Replying to Calculatorboy:
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By duncanedwards
17th Apr 2015 18:24

Probably

snickersinatwix wrote:

If you live with your mother and share the whole house (well, apart from the bedrooms), effectively live as a family so share meals etc, then if you contribute to the household running costs it is my understanding that this is not taxable on your mother.

 

Probably but that wasn't the question posed by the OP.

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Replying to Matrix:
By Tim Vane
19th Apr 2015 01:56

Absolutely

snickersinatwix wrote:

What a charming comment.  If my comment was a waste of time, then yours was even more so. 

Yes indeed. People should be able to reply to any question with the answer to a completely different question, and do so with impunity. It's the only way for this forum to work.

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By Anne Robinson
18th Apr 2015 16:36

I'm not so sure that OP said it was rent a room rather his mothers spare flat?

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By Stapes55
20th Apr 2015 12:41

Thanks again everyone. As for not paying tax twice as a family I meant that I was hoping that we could only pay tax on one rental income as we would do if I decided to live in my own flat and only rent out hers. Anyway, question resolved thank you.

Anthony

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