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366 posts

Ultimate Geek


# 214660 23-May-2017 09:16
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Yes, I know I should see an accountant, but to test the water first:

 

Ive been doing my own accounts since 18 years old and am now over 60. Forms I need to do are IR3 and IR7 for a partnership.

 

Something has me stymied though and I would like some advice which I cant go to IRD for due to them perhaps taking advantage of my disclosure:

 

I have 3 daughters all of whom stay at home. 1 College, 1 18 yo works part time. 1 who works full time.

 

We are a Christian family and do not want to be beholding to the Government for support if possible so we support both the elder daughters. The 18 year old pays no rent and the working girl pays miniscule (to help her with her future plans).

 

I believe that IRD have a 'fair rent' policy which determines that a tenant (who would be both elder daughters) should be paying a fair rent which I guess IRD may determine as $150/week or similar. The reason for this is that needs to be declared as income and taxed accordingly, so our generosity would not be considered, and we could potentially be liable to tax surcharge for our current support of our daughters.

 

I could be wrong of course and hence the call for help here by anyone who may be qualified to answer this correctly.

 

Thanks kindly.

 

Alistair.


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BDFL - Memuneh
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366 posts

Ultimate Geek


  # 1786434 23-May-2017 09:22
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freitasm:

 

I can see a wave of "See an accountant" replies coming. Nothing wrong with the advice, just be prepared for it to be repeated...

 

 

Yep and hence:

 

I could be wrong of course and hence the call for help here by anyone who may be qualified to answer this correctly.

 

Cheers.

 

Al.


 
 
 
 


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Ultimate Geek
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  # 1786436 23-May-2017 09:24
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From IRD

"If your income from boarders is less than the standard cost allowed, you will not have to file a tax return, keep records of related expenditure, or pay tax."

"$257 each for the first two boarders, and $210 for each subsequent boarder."


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  # 1786438 23-May-2017 09:25
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What part of the country are you in?


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  # 1786443 23-May-2017 09:31
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I am not a lawyer or an accountant, so my free advice is maybe not even worth as much as you've paid for it wink, but I think you have it backwards ...

 

As I understand it, you are allowed to charge a child for board or rent up to a particular amount (which used to be $150, but I think is now significantly more - apparently "$257 each for the first two boarders, and $210 for each subsequent boarder"), without you having to declare it as income. If you choose to charge them less (or even nothing), this is OK with the IRD.

 

The child certainly doesn't incur any kind of FBT or implied income liability if you charge them less than 'market rates'.
In fact, if the child was an adult and on a benefit, the less you charged them the less the government would have to pay them for Accommodation Supplement, etc.

 

As well as it being ethically OK to help your children out, it looks like it's also legally OK as well!

 

 

 

 

 

 

 

[Edit: add current IRD figures from other poster]




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Ultimate Geek


  # 1786454 23-May-2017 09:34
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solutionz:

 

From IRD

"If your income from boarders is less than the standard cost allowed, you will not have to file a tax return, keep records of related expenditure, or pay tax."

 

 

 

 

Brilliant, I could not find that info. The IRD website is so convoluted its hard to contact them, let alone find info, and thats when its actually online!!.

 

Much appreciated and its put me at ease.

 

Kind regards, Al.




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  # 1786456 23-May-2017 09:36
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PolicyGuy:

 

 

 

As well as it being ethically OK to help your children out, it looks like it's also legally OK as well!

 

 

Hole in one!


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