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Paying tax on children's rent

(9 Posts)
MelbourneClown03 Mon 02-Jan-17 15:59:43

DP and I live with my DM in her house.

We jointly pay her £600 a month 'rent' (inner West London suburb, so not really the going rate for a room / house share in West London but it means DM isn't out of pocket by having us with her).

Does DM need to pay tax on the rent we pay her? We can't seem to find any specific information on the HMRC website that deals with taking rent, from family members and the thresholds for having to declare and pay tax.

Can anyone shed any light on it?

Ciutadella Mon 02-Jan-17 16:03:56

This may be relevant?
www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

But I am not sure how it works if there is more than one person being the 'lodger'. Call the HMRC helpline to check?

greenfolder Mon 02-Jan-17 16:05:29

Well your dm isnt liable for tax renting a room out if it is £7500 a year or less.

MelbourneClown03 Mon 02-Jan-17 16:20:00

Thank you for your quick responses.

Even if the amount is under the tax threshold, I'm guessing she still needs to declare it to HMRC. Would DM have to register as self employed confused or just find another way of letting the tax man know? She herself is employed full time, so doesn't currently complete a self assessment tax return.

RJnomore1 Mon 02-Jan-17 16:21:43

Is it rent or a contributionto household costs? Because I'm sure there is a difference between a family of adults splitting costs and letting out a room?

greenfolder Mon 02-Jan-17 16:22:33

If she is paye i really would not bother! Surely its just adults sharing the costs of the household? My dds pay me £200 each a month. We call it rent but it isnt really. Its their contribution to shared costs.

DoubleCarrick Mon 02-Jan-17 16:23:42

My knowledge isn't up to date but it used to be that if renting under the 'rent a room scheme' you didn't need to declare it to the tax man

MelbourneClown03 Mon 02-Jan-17 16:34:31

Yes. We call it 'rent' but really it's contributing to the running of the house and making sure DM isn't out of pocket by having us to stay.

With that £600, it means that we contribute our share of the council tax, water, electricity, gas and Sky bill. We wouldn't get change from £1000 a month, if we rented a room in the house next door to us. We just thought we ought to keep everything above board with concern to the tax man wink

Thank you Mumsnetters.

specialsubject Mon 02-Jan-17 18:42:32

you are indeed under the rent a room limit so all good.

for info - there are 'property' pages on the tax return which is what landlords use to declare income. Not the same as being self-employed. But in your case, no need I think.

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