Payments Received From Family Members

Hi, I'm wondering if there would be any tax payable on payments received from Family Members living within my household? My siblings live with me and pay a contribution to help with the running of the house which i own that we all live in. I would have thought that as we are one household and all related this would not be seen as income and therefore not declarable? We all have separate rooms, and so if they were to be seen as 'Lodgers' then this would in the eyes of the law create a HMO type of arrangement, which i don't believe is the case according to my interpretation of the guidance.

Hi,
 

Thank you for your question. It appears that your situation may fall within the Rent a Room Scheme. The amount of income you can receive from the scheme is £7,500.  If the income you receive is below the threshold, you do not need to do anything. Further information is available  at: https: www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme .

Thank you .

Are you sure this would fall under the Rent a Room Scheme? The scheme says that I must let furnished accommodation within my residence to a 'Lodger' to qualify, and goes on to say that a 'Lodger' is classified based on whether 'you or a member of your family share a kitchen, bathroom or living room with them'. Would it therefore not be seen as the case that family members are not classified as 'Lodgers'? As in fact they are already a member of my family and implicitly applied as excluded. If family members are not lodgers, and make a contribution to the bills, would this therefore not be seen as a 'profit generating' measure and instead an informal familial arrangement where siblings share one household and contribute to the costs? I would ask another question, take for example parents that allow their children to stay living in their family home and pay a contribution...if that contribution took them above the rent a room allowance (let's say the parents have 3 kids all paying £300pcm for a total of £900 pcm), would you expect the parents to pay tax on those contributions? The issue of HMO is also prudent, because if family members are considered lodgers and contributions they make taxable, then is Capital Gains tax not payable when that home is sold?

Hi,
 

Thank you for your question. From the information provided in your question and the previous query, as you have noted specifically the criteria regarding sharing a kitchen, bathroom or living room with them held under the “Your lodger is an excluded occupier” it does seem apparent that the Rent a Room relief would meet your circumstances, so I would advise would apply as technically, a private agreement would be in place between yourself and family members held in the following guidance https:  www.gov.uk/rent-room-in-your-home/rent-bills-and-tax . Thanks  .

My wife and I retired in UK and my kids are working in UK. One has her own house and one is living with us. They both transfer cost of living to us monthly, in total around £3,500 per month. As they have paid tax of their income under PAYE scheme in UK, do I need to file tax return of these amount of money annually ? Thanks G Chiu

Hi, not sure if this is the way to post a query, I own my own home my stepson pays towards the bills, he has his own room, shares the bathroom and kitchen all of his meals are provided, no formal 'rental' agreement is in place, now find that I am paying tax on his payments, would I qualify under the rent a room scheme

Thank you for your question if you let a room in yout own house you may qualify for relief under the Rent a Room scheme which allows you to receive up to £7500 pa without incurring any liability or needing to complete a Self Assessment return. More information can be found in our Helpsheet HS223 which is available on our website at Rent a room Helpsheet