Bríd Smith (Dublin South Central, People Before Profit Alliance)
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112. To ask the Minister for Finance if he will reconsider allowing the children of landlords registered with the Residential Tenancies Board (RTB) to claim the rent tax credit; if he will specifically refer to a case (details supplied); if he will explain the rationale for excluding this cohort; to indicate if there are plans to include this group in the future, or offer an exemption if the tenancy and landlord are RTB compliant; and if he will make a statement on the matter. [43593/24]

Jack Chambers (Dublin West, Fianna Fail)
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Section 473B of the Taxes Consolidation Act (“TCA”) 1997 provides for the rent tax credit, which is, subject to a number of conditions, broadly available in the following three circumstances:

1. where the claimant makes a qualifying payment in respect of a residential property which he or she uses as his or her principal private residence,

2. where the claimant makes a qualifying payment in respect of a residential property which he or she uses to facilitate his or her attendance at or participation in his or her employment, office holding, trade, profession or an approved course, and

3. where the claimant makes a qualifying payment in respect of a residential property which his or her child uses to facilitate his or her child’s attendance at or participation in an approved course.

Further details in respect of the credit, including comprehensive guidance on the full range of conditions which must be met and how to make a claim, can be found in Tax and Duty Manual Part 15-01-11A at:

.

One of the conditions attached to the rent tax credit pertains to the relationship between the claimant, tenant and landlord. Furthermore, the manner in which this condition applies varies depending on the nature of the tenancy concerned.

As regards the scenario raised by the Deputy, section 473B(7) provides that where the relationship between the claimant and the landlord is that of parent and child, or vice versa, the rent tax credit will not be available in any instance. This will be the case irrespective of the nature of the tenancy concerned and its Residential Tenancy Board registration status.

The rationale behind the prohibition on tenancies of this nature is that if such arrangements were allowed to qualify for the relief, it would leave the tax credit open to possible manipulation where parents and their children could collude to create a tax advantage for either party, which was not warranted. While there is no suggestion of collusion or manipulation in this case, it is not possible to legislate for a relief of this type which caters for every specific situation.

In designing tax measures, there is a balance to be struck between providing support to as many people as possible consistent with the overall policy intention behind the measure and ensuring that there is an appropriate degree of control in the management of limited Exchequer resources. The current rules for the rent tax credit seek to achieve such a balance.