Can I secretly rent my house to my son

[Pinkpanther111]

i am wanting to rent a bungalow. Instead of selling my house my son will pay rent to me.
can I do this without telling anyone?

TIA

Well, that's told me nothing.

What do yoh mean secretly rent it out?

Ridiculous post, assuming it is genuine, are you saying you want to rent a bungalow privately or HA/council? And not tell anyone that you own a house and will rent it to your son, without declaring any income for tax purposes? And everything will be great because you think you’ve thought of the greatest loophole ever? maybe even your son can claim housing benefit and pay it to you?

There is some real BS being posted on here this week. Lots of people at home with no last minute shopping to do.

There are a whole load of landlord/renting standards you would have to comply with plus you would need to notify HMRC in case you were liable to pay tax. I’m guessing if it were a cash in hand situation where you didn’t pay the cash into the bank, it would be harder to track but pretty sure this is tax evasion and illegal. Depends how much risk you are willing to take.

If you trust him he could pay in cash. Or you could charge him just £1.

Who are you renting from? Local authority? Housing Association? Alms houses for older people on peppercorn rent? Private landlord?

a newly built bungalow so not sure tbh.
the local estate agents is selling it.
sorry not much information, I need to find out.

What I mean is do I have to go through solicitors etc.

Thank you. This is what I needed to know.

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.

Well OP can’t. I’m I’m I’m in

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

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

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

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

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.

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.

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.

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.

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.

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

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.

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.

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

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!”