Crosswords1 min ago
Law on 2 homes
I own a property which I have friends house sitting in, (I am fleeting between there and a friends for job convinience for now) I am also being given a flat on site with a new job working for a homless charity. my questions are as follows:
Can my friends live long term in my owned flat, register for the gas & electric as they will be using 90% off it & and simply gift me money every month according to there own discression?
Can my owned property be my main residence and the flat with job be a perk that I utilise when I wish?
Many thanks all you gifted and intellegent people out there!
Can my friends live long term in my owned flat, register for the gas & electric as they will be using 90% off it & and simply gift me money every month according to there own discression?
Can my owned property be my main residence and the flat with job be a perk that I utilise when I wish?
Many thanks all you gifted and intellegent people out there!
Answers
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Your 2 questions start with a "Can" Yes, you can do these things.
If you are looking at the tax side of things then I'm sure there are people on AB that are more wise to this than me, but from the looks of it there are HUGE tax implications.
You would need to declare the income from your home and pay tax on the "perk" of your job, as this is payment in kind.
If you are looking at the tax side of things then I'm sure there are people on AB that are more wise to this than me, but from the looks of it there are HUGE tax implications.
You would need to declare the income from your home and pay tax on the "perk" of your job, as this is payment in kind.
Your friends can't "gift" you money in effective lieu of rent, no. It IS rent and it would be taxable. It's clearly payment for a facility provided and even if not contractual and ad hoc it would be taxable income.
You can, as a matter of fact, only have one property as your main residence for tax purposes. If you are genuinely staying part of the time at both then it should be your owned property as you could suffer later capital gains tax issues if you sell this property and it hasn't been your main residence for some of the time. As you don't own the other one there's no real reason to define it as your main residence unless as a matter of fact it IS. If you are merely talking about staying occasional nights there though you have no reason to define it as such.
You'll have to pay tax on the benefit in kind of being given a flat with your new job. But you will have to pay that whether you live in it or not so it's fairly irrelevant. The ony way to avoid that would be not to take possession of it at all. The tax on this benefit will be taken care of at source by your employer under PAYE so it doesn't in itself need you to do anything.
End of the day you need to decide whether you want to let your friends live at your house rent free or charge them rent. You can let them live rent free if you like and just pay for the utilities. There's no tax implication of that but if they pay you anything for the flat then it's taxable. If your friends take on the utility bills the Revenue would use that as evidence that the owned property was no longer your main residence in the event of a capital gains tax assessment being raised when and if it were eventually sold.
You can, as a matter of fact, only have one property as your main residence for tax purposes. If you are genuinely staying part of the time at both then it should be your owned property as you could suffer later capital gains tax issues if you sell this property and it hasn't been your main residence for some of the time. As you don't own the other one there's no real reason to define it as your main residence unless as a matter of fact it IS. If you are merely talking about staying occasional nights there though you have no reason to define it as such.
You'll have to pay tax on the benefit in kind of being given a flat with your new job. But you will have to pay that whether you live in it or not so it's fairly irrelevant. The ony way to avoid that would be not to take possession of it at all. The tax on this benefit will be taken care of at source by your employer under PAYE so it doesn't in itself need you to do anything.
End of the day you need to decide whether you want to let your friends live at your house rent free or charge them rent. You can let them live rent free if you like and just pay for the utilities. There's no tax implication of that but if they pay you anything for the flat then it's taxable. If your friends take on the utility bills the Revenue would use that as evidence that the owned property was no longer your main residence in the event of a capital gains tax assessment being raised when and if it were eventually sold.
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Oh and just to add, it's possible that if it is a requirement of the job sometimes to live "on site" wherever it is and you can demonstrate that you otherwise wouldn't need to leave your existing home (no idea how close it is obviously) then there may well be no taxable benefit in it.
I've no doubt the people doing payroll at the charity will know since presumably the previous incumbent had the same issue.
I've no doubt the people doing payroll at the charity will know since presumably the previous incumbent had the same issue.
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