Ok long story short, my mum let my brother stay at the house under her name by himself. lately he decide to rent out the rooms to get extra cash. Would that cash be tax under his name or my mum? Me i think it be tax under his name but my sister think it be tax under my mum since the house is under her name.
Rental Tax Question
2Poor4Ozb on 13/01/2020 - 22:29
Last edited 13/01/2020 - 22:35 by 1 other user
Last edited 13/01/2020 - 22:35 by 1 other user
Comments
she doesnt mind he renting out the room (nice mum), that's what i though if he get the rent then he should be tax and not my mum
Does she own the house or is she renting for you brother? If she owns the house tax would be payable by your mum and capital gains will apply. This is all of course assuming the income is and corresponding deductions are advised to the ATO
she own the house and letting him live there rent free, now he just renting the rooms out but she doesn't mind
cash
Shhhh.
Your mum doesn’t have to pay anything.
lol
Is the house reported as an investment property with interest deduction etc in her tax return? Or is it her main residence?
main residence but she live with my sister
Careful with that as she may not be able to get a full CGT exemption later on when selling the house:
https://www.ato.gov.au/general/capital-gains-tax/your-home-a…We can argue that your brother rent a property at zero cost to conduct a business (renting out rooms). Your mum does not need to know anything about it, which mean she reports nothing to ATO.
But ATO may still see the property as income producing asset though, if they find out about it.You/she realises that's technically tax fraud, right? Don't broadcast it online lol.
will delete all my account!!!! i never existed
Make sure your mum has the right insurance for the house, given there are now paying tenants.
If your brother is pretending to be your mum, "…let my brother stay at the house under her name…", then your mum pays the tax. Situation could be deemed that your brother is simply acting on behalf of your mum (eg. she may not be able to speak english or something). So all paperwork is linking your mum to the money and you're simply helping her by getting and interacting with the tenant.
If there is a rental agreement (assuming there is one) and if its in your mum's name, then again, tax gets paid by her. If no agreement exists, and brother is doing cash in hand, then again mum might be in the firing line for any non-declared income. If the agreement is in his name, then he pays the tax but you best advise them to get their paper work in order to link mum's permission to your brother just in case insurance issues or other arise with the house or tenant (eg. they injure themself).
If it's a cash in hand situation, just be aware of who your brother gets as a tenant. I know a few that do cash in hand and when the relationship went pear-shaped, the tenant dobbed the owner into the ATO.
so tax should be through my mum and not my brother? I really though it be my brother as he getting the money
Your brother is handling the money but acting on behalf of your mother. Your mother could be giving away the money but it's a rental income against/for her property.
I don't handle any monies for my properties, but it all legally links to me. Whether it's a brother or (in my case) real estate agent receiving/handling the money, it's still all under my name/properties.
Can I rent your mom? :-)
you can but buy a gravestone 1st
your mum is allowing him to stay there for free, then as a tenant he is subletting rooms without the owners permissions i am guessing, whoever gets the rent pays the tax.