Can I claim relief on private homecare paid by my mother?

My mum has dementia but luckily is still living at home. She has a combination of home help hours funded through the HSE, time spent with her by myself and my siblings and about 10 hours of privately funded home help as part of her care plan (this amounts to about €900 a month).

The privately funded care has been paid by her up to now. The payment is transferred from her account (my brother is a co-signatory of her account) to mine and I write a cheque to pay. Could I claim tax relief on the cost of the privately funded home help and use any savings to pay for more care?

Should I be declaring this as additional income and paying tax on it? My mum is on the State pension and doesn’t pay tax as her annual income falls below the tax threshold.

Her funds are starting to run low now so my siblings and I intend to contribute to the cost from our own funds. Are we entitled to any tax relief against the contribution we make?

Mr M.H., email

There is provision for tax relief on the costs of homecare but the key thing is who is paying it. If you are paying the €900 a month, then you are eligible to claim the relief. And it's worth it, as relief on private home care is one of the few still allowable at your higher rate of income tax.

Of course, if your mother is paying the bill, then it is she who can claim the relief and, as you point out, that is of no real benefit as she has no tax to claim relief against. It makes much more sense for you, or your brother, to pay those bills as you have tax against which you can claim the relief.

Working the sort of transfer you now operate makes little sense. You are paying the bill but with your mother’s money, so it is effectively she who is paying the bill and unable to claim relief.

Treating the money as a transfer to you makes sense only if there is no danger of you exceeding the lifetime limit on gifts and inheritances from a parent (currently €225,000, either now or following the eventual passing of your mother). The €900 a month will be seen as gift from her to you. That’s €10,800 a year and, while there is a small gift exemption of €3,000 per annum, the balance of €7,800 will be set against your lifetime limit. If that limit is exceeded, you will be liable to capital acquisitions tax on the money.

In the end, it appears that your family is going to be moving to making the contributions from their own resources anyway. If, as you suggest, a number of you will be contributing to the cost of your mother’s private health care, then each can claim on the amount they contribute. Clearly, if they themselves pay no tax, they can have no relief and if they pay tax only at the basic level, they will be able to claim relief at the basic 20 per cent rate.

The maximum you can claim in relief in any year is €75,000 but that is well beyond the figure you are currently considering, even before the bill is split among several of you.

Do I owe tax on former UK home?

After reading your article regarding the changes in UK CGT, I’m left a little confused. I have a house in the UK that was our main home until we moved back to Ireland five years ago. We rented it out for the last four years and now want to sell at as we have no intentions of moving back to the UK.

What are our tax liabilities as non-resident owners if we sell? It was valued on March 30th at £365,000.

Ms A.H., email

You're not the only one confused. Essentially, the UK has decided not unreasonably that non-residents selling UK property should be subject to the same capital gains tax regime as UK tax residents. The new rules kicked in last April, and this is important, especially for people in your position, because the new capital gains tax regime is not retrospective.

Fundamentally, if you sell a property, other than your principal private residence, you may be subject to an assessment for capital gains. In very broad terms, the capital gain is the difference between the purchase price and the sale price. There are also some expenses that you can deduct from any gain. These include costs incurred in buying and selling the property, including legal and estate agency fees.

You can also deduct the costs of any improvement works carried out on the property – although normal maintenance costs, like decoration don’t count. Equally, you cannot claim for interest paid on any loan to purchase the property. Having said that, there are certainly things you can do to mitigate any bill or even cancel it out.

First and most important is that April date. The new regime only kicks in then. Under the old regime, as a non-resident, you would not have been liable to capital gains tax on such a sale. Being fair then, the UK revenue will only tax you on any gain in the value of your property from the date of introduction of the new legislation – April 6th, 2015.

As you can also claim reliefs available to UK residents under capital gains, the first £11,000 of any gain this year (since April 6th) will also be exempt from calculation for capital gains tax. So, if you sell your home for, say, £370,000 and it was worth £365,000 at April 6th, you’ll have no CGT worry. You can also claim partial principal private residence relief, having used the property as your main home for a time.

You don’t say when you bought the house but let’s say it was in June 2004. On that basis you have owned it for 11 years (or 132 months). You have it rented for the past four years which is 48 months. However, for the final 18 months of ownership, a residential property is always deemed to be owner-occupied as long as it was your main home for at least some of the time, so you deduct 18 months from your 48 and you are left with 30.

So for 30/132nds of your ownership of the house, it was rented out. For the balance, you should be able to claim principal private residence relief. Only 30/132nds (or just under 23 per cent) of any capital gain is liable for tax – and even then only if that fraction exceeds the £11,000 annual exemption.

All told, it is unlikely you have any CGT tax liability on this former UK home if you are selling in the near future. However, bear in mind that you will be obliged to inform the British Revenue Commissioners of the sale once it is concluded – even if there is no tax owing or there might even be a loss – and you may well have to complete a tax return.

Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes. com. This column is a reader service and is not intended to replace professional advice.