How to declare money from DD

74jax

need_an_answer wrote: »

So are you all living in the same property and she's just paying you housekeeping?

or is she moving into a property that is owned solely by your husband,her stepdad?

2 different things and I believe if its the first option theres nothing to declare,if its the second option then I believe that the whole LL/tenancy thing might come into play.

Yes she will be living in a property owned by her step dad, but as he refuses to take money from her I am being the evil monster so to speak and making sure she pays her way.


The money is paid direct to me - not a joint account. If it was a joint account we could continue to declare as rental on my husband's tax return, but as it's my account and I don't own the property I can't declare it as 'rental' as I don't have a property to rent. I can I believe declare it as Misc Other.

OscarFoxtrot

74jax wrote: »

Yes she will be living in a property owned by her step dad, but as he refuses to take money from her I am being the evil monster so to speak and making sure she pays her way.


The money is paid direct to me - not a joint account. If it was a joint account we could continue to declare as rental on my husband's tax return, but as it's my account and I don't own the property I can't declare it as 'rental' as I don't have a property to rent. I can I believe declare it as Misc Other.

Thanks for paying taxes for literally no reason...

need_an_answer

Theres a current thread over on the housing board which sort of complements yours...parent wants to let young adult child live in a property but not charge rent...which is fine I get that whole scenario.


The problem starts to kick in when money is handed over as a payment for living there...it creates a tenancy and your husband I think would become the LL with all the compliance that comes with it


No money being handed over negates a tenancy so I would possibly go with the idea that others have raised and ask your daughter to put the money aside in a separate savings account,therefore handing over no rent.


I understand the sentiment and that you will hand it back to her at a later date but as it stands it could be viewed by HMRC as having implications.


I suppose what you need clarification on is whether a step parent is classed as relation in the eyes of HMRC and whether that has a direct bearing on income.

There are different ways of expressing words and terms..."housekeeping" is often thought to be what a non dependant pays to a parent to help with bills in the property they all live in
Rent is paid to a separate person to live in their property.

You often see posts here that ask how much rent should my child pay when really the arrangement is more akin to housekeeping.


Paying rent for a property bring in a whole different set of compliances that you wouldn't get with living at home

74jax

OscarFoxtrot wrote: »

Thanks for paying taxes for literally no reason...

We have paid tax on the property ever since it was rented out. The fact it is my DD makes no difference. The credit is clear to see in my bank statement and believe me if I didn't i would be the one found out.

The fact I don't want my daughter to live for free is between me and her and my husband. I have my reasons.

I honestly didn't know how to declare it, when I didn't own the property.if she paid it to my husband we wouldn't have the issue.

There is every reason to declare it, the fact she is my DD makes no difference and I would hate someone to get into trouble reading you think it doesn't need declaring.

Yes I could let her just pay the bills, but I don't think that is right. I know it's a harsh view.

Socajam

LilElvis wrote: »

If you have instilled her with a good sense of financial responsibility then, presumably, if you sat her down and told her that you were prepared to let her live rent free as long as she saved the money towards a future deposit then that is what she would do. Taking rent from her with the intention of returning it to her says that you don't trust her to do the right thing, so you're going to treat her like a child rather than an adult.

My sister and I were allowed to live rent-free with the proviso that we saved towards our deposits so we could buy our homes sooner. Both of us did so and I've been effectively mortgage free since I was 43. Our parents taught us financial responsibility and we were very aware, and grateful, that they were giving us a great opportunity to get on the housing ladder sooner rather than later. I know I would have been incredibly offended if my parents had done what you are proposing.

I fail to see what the OP is doing is so offensive. I would do the same thing and put the money in a joint bank account with both our names on just in case something happens.
Hurray for what your parents done, but everyone is different. Also it all comes down to a question of trust. Who is to say that this young lady will do what her mother suggested.
If she moves away from home, she will have to pay rent, so get her into the habit now, because contrary to popular belief, nothing in life is free.
Some people have the discipline to carry out what you did and to achieve their life goal, others fall by the way side because they think that the bank of mom and dad will pick bail them out.
Congratulations on your achieve and for being mortgage free at 43

74jax

need_an_answer wrote: »

The problem starts to kick in when money is handed over as a payment for living there...it creates a tenancy and your husband I think would become the LL with all the compliance that comes with it

I suppose what you need clarification on is whether a step parent is classed as relation in the eyes of HMRC and whether that has a direct bearing on income.



Rent is paid to a separate person to live in their property.
Paying rent for a property bring in a whole different set of compliances that you wouldn't get with living at home

Thank you for your reply, I'll head over to that board (didn't know we had one and read the post.


I think what makes my situation tricky is I don't own the property so DD paying me makes it harder. I can't declare it as 'rent' as I am not renting it out. I think however adding it in the Misc Income section will cover the credit on my statements.


I completely understand the whole gifting it back to her and 7 year rule etc so that side is ok, it's just covering myself and the credit on my statement.


Maybe we should just put the property in my name and that will solve it - wonder if hubby will agree

Socajam

74jax wrote: »

If you receive ‘housekeeping’ from your child what is the usual way to declare this?

The money will be going from my DD to myself in my bank (account is my name only). It’s not for a property I own, but my husband who owns it doesn’t want to receive money from her, however I don’t think she should stay there for free so we have reached an agreement where she stays there, pays me money each month (but unknown to her will get it back for a deposit or such like in future).

Just wondering what you all do – this can be moved to the tax board if the mods think it is more suitable there. I’m guessing I can’t declare it as rent as how can I rent something I don’t own? Would it be a gift from DD to me, then in a few years be a gift back to her?

I am of the same mindset a you. Make her pay, because the big wide world out there is not a good place to be with life skills. A lot of young people are finding it out the hard way and if only parents had done something similar to teach them about bill paying etc.
Open a joint bank account in both your names and deposit the money there. She does not have to know.
Just in case something happens to you, her name is already on the account.

CRANKY40

I'd be tempted to set up a joint savings account with her. Make it "both to sign" so that neither of you can withdraw without the other and tell her that if you can afford to you will put some money aside when you can to help her at the end of her studies. She doesn't have to know what you're putting in it. That way her money continues to be hers, the whole gift and surviving 7 years doesn't come into it and you are also following her stepdad's wish that she doesn't pay rent.

Mojisola

Socajam wrote: »

Open a joint bank account in both your names and deposit the money there. She does not have to know.

How can you open an account in someone else's name?

Keep_pedalling

74jax wrote: »

We have paid tax on the property ever since it was rented out. The fact it is my DD makes no difference. The credit is clear to see in my bank statement and believe me if I didn't i would be the one found out.

The fact I don't want my daughter to live for free is between me and her and my husband. I have my reasons.

I honestly didn't know how to declare it, when I didn't own the property.if she paid it to my husband we wouldn't have the issue.

There is every reason to declare it, the fact she is my DD makes no difference and I would hate someone to get into trouble reading you think it doesn't need declaring.

Yes I could let her just pay the bills, but I don't think that is right. I know it's a harsh view.

You say we have been declaring it, but you don’t own the property the only person who should be declaring it is you husband. If you want to take advantage of your allowances then he should consider a transfer of ownership.