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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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?
agree
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.
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.
Smell test
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?
Pedantic?
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.
Your choice
Perhaps that part of the reason I no longer have an accountancy practice and prefer to work in less rarified circumstances.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.
Probably
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.
Absolutely
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.