Boarders
| # | Post |
|---|---|
| 101 | dinx wrote: No one in their right mind would consider your progeny contributing to family household costs as "renting". Don't panic, dinx. sparkychap - 2021-01-24 08:38:00 |
| 102 | melagray wrote:
I think you will find that the tax liability definition with the IRD (based on actual use) and not with your novel/quaint definitions of what constitutes a flat. if the people you have in your house fit the IRD definition of a boarder then they are a boarder and if they fit the definition of a flatmate then they are a flatmate. You are liable for tax accordingly. The ownership status of the dwelling as you are saying matters naught. See the posts by Sparkychap to find the correct way of looking at this. Edited by shanreagh at 10:46 am, Sun 24 Jan shanreagh - 2021-01-24 10:44:00 |
| 103 | sparkychap wrote:
I'm not panicing at all, just think the possibility is ridiculous if the main criteria to decide either/or was meals. If pushed IRD also consider the intent of the tax law too or at least that is a principal they have applied in some grey areas. dinx - 2021-01-24 11:17:00 |
| 104 | dinx wrote: But its not. The "regular meals" is one aspect that determines the difference between a boarder and a flatmate for tax purposes when renting a room in your own house with the intent of achieving an income. Having a grown kid paying a contribution to household costs isn't going to get counted as them "renting" from you. sparkychap - 2021-01-24 13:05:00 |
| 105 | sparkychap wrote:
But its still an debatable rule, anyone seen anything under the technical tax area of the IRD site that accountants used to find case or specialist rulings, or does that still exist? I have in the past had another extended family member I the live in the same space also boarded with us as a favor and self catered due to their preferences. Their timetable didn't suit so they batch made lunch+dinner freezer meals they liked themselves they could take at eat elsewhere. Again if IRD were concerned it was also a negative (ideally neutral but wasn't) income level and way below, market rates. How far removed from immediate family? Maybe once a fortnight or month they might have a meal with us, if they were home I'm not mean enough not to share a roast if they smelled it cooking all afternoon. I read the rules as including more than a flatmate that includes extras that could include meals and/or other benefits, not that it must include meals. There aren't tenancy rules defining what a flatmate or boarder is entitled to to clarify. IRD would have to also consider if the intent is to earn income because many boarding arrangements will be neutral or negative if you truely split costs. Bit like the hobby activity vs small business activity. You can't claim your hobby costs and making a loss loss if you aren't actively trying to make profit out 9f it eg selling crafts etc. dinx - 2021-01-25 20:52:00 |
| 106 | Dinx - read the thread. I quoted from the Technical Tax Determination earlier. sparkychap - 2021-01-25 20:53:00 |
| 107 | And of course there are no definitions of a boarder or flatmate in the RTA because it doesn’t cover those situations. sparkychap - 2021-01-25 20:59:00 |
| 108 | Which determination are you referencing sparkychap? Curious if you have found newer ones which would replace one I did come across? Granted I'm tired but the ones I found was two references. IR1037 2019 mentioned the flatmate situation and interesting wording about intent Also references Bulletin Vol 17, No 10 Dec 2005, Det 05/03, language in these tends to be quite specific says But it does not state say boarding does or must include any or all of those examples of described services just that they are typical. It does however earlier in the determination refer to boarding being provided by a natural person/s in their domestic home. I would think that description would have more weight than meals being included or not and defining a boarder isn't determined by who is cooking and shopping. Flatmates often cook for each other too. ;-) dinx - 2021-01-26 00:13:00 |
| 109 | So Dinx, what do you think the difference between a flatmate renting a room from a landlord in his/her own home and a boarder? sparkychap - 2021-01-26 07:48:00 |
| 110 | sparkychap wrote: Boarders pay a flat rate, so a rates increase or high power bill isn't split. I still say bugger the food, and will not be stressing over who feeds future boarders if it ever becomes a relevant detail in future. melagray - 2021-01-29 19:35:00 |
| 111 | melagray wrote: Are you paying income tax on all the rent from your "boarders"? sparkychap - 2021-01-29 19:45:00 |
| 112 | To me the definition isn't based on meals alone but the overall nature of the arrangement, individual arrangements can and do vary widely. A boarder is someone who pays a fixed weekly amount for room and typically but not specific defined additional services/benefits in someone else's home, be that a rented or owned home. But what those services or extra benefits can vary by individual agreement. Sometimes those services work in reverse too and I've heard of boarders exchanging some odd babysitting or household jobs like doing the lawn in exchange for discounted board too, but not to the degree of someone who's accom is part of their actual employment. So a nanny isn't a border but employment related accom is another whole area. Boarding may include meals and that is a common included benefit but if it doesnt that doesn't make them a flatmate if it doesn't imho. It could include things like laundry and host doing housework of common areas, but again those can be negotiated. Boarding may include a very high level of services such as home stay situations or very basic like a professional or adult student in a city who just uses a room x nights a week and goes home elsewhere on weekends. A border isn't responsible for a share of household bills or chores, flatmates typically shares expenses and responsibilities. A border is being hosted more or less in someone else's home, a flatmate arrangement is more equal in the nature of the arrangement incl responsibilities too but there is potentially still a head tenant or the owner could be the head tenant etc. I don't think exclusive access works as a rule or guideine, there is too much crossover. I typically wouldn't enter a boarders room without permission either. dinx - 2021-01-30 23:03:00 |
| 113 | Hi Guys, I'm looking at renting room in Rangiora in modern house, good size room with large wardrobe, will have own use of bathroom to themselves, power and Internet included, off street parking.. Whst would be reasonable weekly charge. reefshack - 2021-02-06 05:30:00 |
| 114 | dinx wrote: Yeah, actually it is. sparkychap - 2021-02-06 10:13:00 |
| 115 | sparkychap wrote:
Still disagree on this particular view while I generally agree with you Sparky. I've looked further into the more recent determination wording but I still think there is room to challenge it on if the wording still has too much ambiguity in the language if it must include meals or means typically include meals. We don't know how that has actually been tested but every example varies anyhow and that determination would still have to be backed up with actual tax law if appealed. They are far more likely to pursue obvious tax avoidance than cases that are debatable unless very large $ amounts on a single household exist. In short boarding imho incudes rent AND additional services and is an arrangement where you are more a member of the host/landlords family. But the exact services aren't clearly legally defined even with an instruction or determination from IRD. But in terms of tax law either renting as boarder or flatmate, both are taxable income arrangements anyhow where the income less expenses is taxable income. The only difference is if you have an option to use the standardised cost threshold for boarding method OR actual cost calculation but for flatmates it must be actual cost calculation method only. In realify there most arrangements are not generating profit if you include all the potentially included cost factors so the debate is likely moot. dinx - 2021-02-06 17:59:00 |
| 116 | "in conjunction with regular meals" is the definition dinx. I love ambiguity, but I'm struggling to find any there. They've tightened up the definition in the latest Determination to make this clearer. And its not a moot point. The incorrect use of the definition leads people to incorrectly post on here that you can have flatmates and not declare income for tax purposes. sparkychap - 2021-02-06 18:09:00 |
| 117 | “Boarders” are people (often students) who live with you, essentially as part of your household. They are provided with accommodation, regular meals and other associated care, activities or benefits that are typical in a family household. Flatmates, tenants, short-stay accommodation guests and the like are not considered boarders, so are not within the scope of the Determination" As you point out (and I have already done so) both incomes are technically taxable, but you can claim either actual cost or standard cost to determine whether you have made a profit. If you have a flatmate and you own the property, you need to declare that income and use actual costs, if its a boarder you can use standard costs, and if the rent is below the standard cost threshold you don't have to declare. If you provide regular meals, you have a boarder, if you don't it's a flatmate. Edited by sparkychap at 6:27 pm, Sat 6 Feb sparkychap - 2021-02-06 18:17:00 |
| 118 | This message was deleted. kittycatkin - 2021-02-06 18:43:00 |
