Contributions towards living expenses for a family member

NAJ123

New member
Feb 14, 2024
3
0
We care for my father in law who has Alzheimers. We are currently converting our garage to become semi independant living accommodation for him. We are doing this at our own expense. When he does move in we will then be responsible for the additional utilites costs and also the his living costs such as food etc. Obviously we are not looking to make a profit from him but would it be reasonable for him to contribute a financial amount to partly cover some of these extra costs? If we were to charge him a certain figure each month would it be classed as rent and then be taxable? How do you distinguish between a contribution to expenses and rent? He recently sold his home to rent somewhere nearer to us as his needs increased but he now needs further care. This money has been put into savings plans in his name ready for when he needs a nursing home and he lives comforbly from his pensions. He pays all his own living expenses and rent now so would be happy to do so again with us. As he would be in a seperate annex I'm not sure if the Rent a Room scheme would apply?
Any help or thoughts would be much apprecaited. Thank you
 

Jessbow

Registered User
Mar 1, 2013
5,712
0
Midlands
No reason why he shouldnt meet his own expenses, not sure 'rent' is as easy- of course he should pay towards heat light & Food etc.

Is it clased as a seperate dwelling for council tax purposes?
 

Bod

Registered User
Aug 30, 2013
1,968
0
Check on the Gov. website for "Rent a Room"
Up to a certian limit, there is no tax to pay.

Bod
 

NAJ123

New member
Feb 14, 2024
3
0
No reason why he shouldnt meet his own expenses, not sure 'rent' is as easy- of course he should pay towards heat light & Food etc.

Is it clased as a seperate dwelling for council tax purposes?
Thank you, Yes it would be classed as a seperate dwelling
 

Daughterinlimbo

New member
Mar 22, 2023
2
0
Your father in law can reimburse you for his share of reasonable living costs, this would not be counted as your income. These are his costs, not yours (unless you choose to support him financially).

Even if it was classed as rental income, there is no taxable profit as the ‘income’ would be offset by the ‘costs’ so the taxable profit is nil.

Rent a room relief would only be available under the same roof like a lodger, rather than in self contained annexe accommodation. But as you don’t intend to make a profit, this wouldn’t be relevant anyway.
 

NAJ123

New member
Feb 14, 2024
3
0
Your father in law can reimburse you for his share of reasonable living costs, this would not be counted as your income. These are his costs, not yours (unless you choose to support him financially).

Even if it was classed as rental income, there is no taxable profit as the ‘income’ would be offset by the ‘costs’ so the taxable profit is nil.

Rent a room relief would only be available under the same roof like a lodger, rather than in self contained annexe accommodation. But as you don’t intend to make a profit, this wouldn’t be relevant anyway.
Thank you, thats very helpful