Family member paying board and lodging question

tanith

I put this on another thread without much reaction....... My grown up son may be coming home to live , I am just wondering if board and lodging he pays me is classed as unearned income ? For tax or benefit purposes would I need to declare it? If it is unearned income then what about all the years he was home and earning in the past? I never even thought about it till now.....

thanks

ariba10

If you total up you'r extra costs of keeping him and his share of the council tax, heating, lighting house maintenance ect. I doubt you will have enough left over to tax.

tanith

I realise that his contribution will be swallowed up in my household bills but I really need to know if I have to declare it to anybody legally if I am asked about unearned income?

Fran

If you are on any income related benefits such as Income Support, Housing Benefit or Council Tax Benefit you need to declare it. For instance if you receive Housing Benefit a non-dependant deduction would be made (money taken off the benefit dependant on the income of the non-dependant). A non dependant is someone over 18. I'm not sure what the Tax Credit situation is. You could give Inland Revenue a ring or Citizens Advice.

CIS

Frans right, you need to declare it for most benefits.

As for tax credits, the manual doesn't state it's deductable, so it probably comes under the miscellaneous income rules, which means it should be declared.

Since, technically, its income, they should be told.

exil

Wait a minute....

1. Is the house yours (owned with no mortgage)?

In this case, just charge him for a share of the keep. He can pay
some of the bills, buy groceries etc, no cash needs change hands.

2. Is it mortgaged?

Remortgage - with all 3 of you paying. Would need to add him to the deeds of the house as well - need to see a lawyer. I can't see why this wouldn't work but I'm not a lawyer!

3. Is it rented?

Change the agreement so you share the tenancy and the rent.

4. Don't fancy these options?

Rent out a room to the son on the rent-a-room scheme, you can charge 80 per week tax-free.

After all, if 6 students share a house, they just share the rent. They don't charge each other rent and pay tax!

mjanet

4. Don't fancy these options?

Rent out a room to the son on the rent-a-room scheme, you can charge 80 per week tax-free.

whats the rent-a-room scheme ?

tanith

the house is owned but with a mortgage............ I like the idea of no cash changing hands though sounds like it might work.... I just need to persuade him to pay some bills or do the weekly shop I DON'T THINK THAT WILL GO DOWN WELL............ but I am sure I could get round it somehow....

thanks for the ideas everyone...

CIS

Rent a room scheme
http://www.direct.gov.uk/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/TaxOnRentalIncomeArticles/fs/en?CONTENT_ID=4017804&chk=mGasop

The rent-a-room scehem is a scheme that allows you a certain amount of tax free income for renting out a room, great news regarding tax, but if you get any social security benefits , they dont always work the same as tax rules.

I think that for HB/Council Tax, the amount of any rent received is counted as income in full. Even if it was tax free for you, on top of other income it could disqualify you from housing benefit and council tax benefit, by increasing your income to too high a level.

The income would also be taken in to account for most other benefits.


If your not on benefits , then just take the money off him and its a private deal that no-one else needs to know about, it's just that if you get any benefits you need to be careful.

margaretclare

This is more complicated than it was decades ago!

In the 1950s we were expected to tip into the household expenses and often someone was there waiting when we got home on the first pay-day!

Having someone else living in the house with you means that there's more expense. You lose the 25% single-person discount on council tax. You pay more for food, heating, lighting, water, use of bathroom, cleaning, toiletries, it all adds up.

In my first marriage we lived with in-laws (for a short while, until I couldn't stand it and I got out) and my husband was expected to give money to his mother for us living there.

Aunty Margaret

tanith

Thanks for all your good tips , I guess as at the moment benefits are not an issue it will just remain between the two of us...... even though he is my son he expects to pay his share of bills and I think he is still getting a good deal .......... and getting a meal cooked most days and I expect I shall soon fall back into the habit of doing some of his washing , but I think he can carry on ironing his own shirts.......