Can I secretly rent my house to my son

why not make an informed comment, rather than what you "think"

Check if you need to send a Self Assessment tax return - GOV.UK

if not required to submit an SA then you do not declare anything on the "government gateway" since there would be no reason for you to be on it in the first place.

@ You most certainly will have to tell HMRC and - if appropriate to your circumstances - pay tax on any profit after taking off any legitimate expenses for which you have receipts!

Just FYI, you only have to do self assessment over a certain amount (I think £1000 per year profit). Below that, you can declare it online on the government gateway.

Ex-landlord here.

lots of legally required checks you need to do to ensure property is safe and to protect yourself if things go sour. Without the required documents a section 21 eviction notice will not stand up and you would need to wait for three months of rental arrears before you serve the other type of notice / go through the courts. Annual gas safety checks and boiler servicing, electrical safety, right to rent documents and checks.

secondly, tenancy agreement is an absolutely must - also to protect yourself in case of non payment of rent or similar

thirdly, tax implications. You would need to declare to HMRC for tax purposes, plus when you come to sell you may be liable for capital gain tax depending on increase on property value and time rented out. Bug fines and no lenience from HMRC if you are caught out. Plus tax threshold for landlords are increasing under new government and renting out property isn’t the cash cow people think it is and certainly not how it used to be.

I would see it all the time in landlord forums, people just like yourself would rent to family and it went horrible wrong, properties were trashed and thousands of pounds of repairs. And most say it started out with zero issues in the relationship.

proceed with caution and don’t dodge the tax. You’ll have to evidence income to be able to pass affordability checks anyway on your next rental.

Dodging inheritance tax, I think.🤔

Only if he's over 60!

Mumsnet is anonymous…

Sure, you can keep it a secret if you’re comfortable with committing tax fraud and are prepared for the criminal consequences if HMRC found out.

Surely you must realise that the fact you need feel the need to keep it “secret” means that you know you’d be acting illegally or improperly, and presumably you just want posters to say stuff like “yeah, just do it. my mate does it and HMRC haven’t cottoned on yet!”

Yes you can do it, and no you don't need a solicitor.

1. I strongly advise having a formal rent agreement with your son. You don't need a solicitor to do this, there are many online services that will facilitate this for a small(ish) fee - I use OpenRent
2. You need to declare the income to HMRC
3. If you have a mortgage on your house you may need to tell your mortgage lender
4. Your son needs to pay Council Tax on the house. You simply write to the Council telling them he is your tenant. You will pay CT on the bungalow.
5. Think about who pays for buildings and content insurances. You may want to pay building insurance on your house but leave your son to insure the contents himself.

I can't think of anything else at the moment. It's all fairly straightforward.
Good luck op

I'm afraid the word secret and public media like mumsnet are not compatible. Whatever you have in mind you have now published your thoughts so wherever you go from here be very careful.

Who will it be a secret from? If you are going to be charging him well below market rate he may not be able to claim housing benefit. This happened when i rented from my Uncle, he gave us 3 months rent free then charged us well below market rate and we were refused housing benefit because they believed due to the only amount, the property was not for commercial gain. This was several years ago so rules may have changed but if you are going down this route to give him the opportunity to save for his own place he may not get benefits.

Not very secret, now you have postee on mums net. If you dont declare to HMRC, its tax fraud.

You don't need any contract for a tenancy, it has statutory terms for any legal tenancy formed, and a legal tenancy is automatically formed immediately if you live somewhere and pay any money to do so. These terms are all you really need, and are honestly better if something turned sour anyway than a set initial term you would expect to be given.

Council tax doesn't care who pays generally, although for things like single person discount they do need to be kept informed. But as above as soon as the son is paying they are legally a tenant and responsible for the council tax anyway.

So you should be declaring the income to HMRC and paying the appropriate tax on it.

if you have a mortgage you should also be informing your mortgage company and in some areas you have to inform the council.

You could probably get away without anyone finding out though. If your son was to “move in” with you before you move to the bungalow. He could also pay your rent directly to reduce the money being transferred.

Do you really want to teach your son that fiddling one's taxes and breaking the law is ok? That's not good parenting.

If neither of you are going to be claiming any kind of benefits which would require declaring this, you could get away with you agreeing for him to live in your home rent-free and for him to choose to pay the rent on the bungalow, but you'll have no legal power to force him if he starts missing payments so this is unwise. Any kind of enforceable agreement between you would create tax obligations and landlord obligations which would make it impossible to keep secret.

I think there are some rules about people on UC renting from family and claiming benefit for that.
So if your son claims that is a consideration.

It is perfectly reasonable to ask as you are hoping for a way to avoid tax or work out the best way possible to do it with minimum cost, if your son was renting and you paid his rent to help him it wouldn't be an issue! Who really wants to pay taxes beyond our earnings?? We are taxed on ridiculous things and its never ending. I would be looking at getting him on the mortgage to avoid inheritance tax down the line. You have paid tax on the money you've earnt to pay for it.

You have to declare rent whether the tenant is family or not.

Not so, Crazyclover - it's perfectly possible if it's a properly set up tenancy and not what they refer to as a contrived one

If your son will be claiming housing benefit then no you can’t as you are a close relative

Well OP can’t. First obtain consent from mortgage company and if given get TR1 or for partial transfer TP1 forms from Land Registry as it’s transfer of equity, then a legal and tax check, to ensure it is not treated as a gift, then register completed forms at Land Registry.

Ensure it is written in your Will.

Best to do it through a solicitor

Well OP can’t. I’m I’m I’m in

You would need to register as a landlord & do the appropriate landlord things like yearly gas safety check etc. and obviously declare your rental income to HMRC.