Your Questions: Can I qualify for a tax break to renovate our rental property?

Noel, Rathmines, Dublin 6

OONAGH SAYS: The good news is yes - as long as certain conditions are met. This Home Renovation Incentive (HRI) scheme, which was previously limited to homeowners, was extended to include landlords from 15 October 2014.

To qualify for the relief, you need to spend more than €4,405 (before VAT) on the property before December 31, 2015. The €4,405 can be spent on more than one job. The work must be carried out by a tax-compliant contractor who is participating in the HRI scheme.

It must also be "qualifying work" - that is, repair, renovation or improvement works, such as painting, decorating, plumbing, rewiring and so on. It does not include money spent on carpets, furniture, white goods, and so on. More detailed guidelines are available on www.revenue.ie.

Your tax relief, which is 13.5pc of the pre-VAT price, will be given as a tax credit over two tax years. (For landlords, the credits will be given in 2016 and 2017). Although you can spend as much as you want renovating the property, the maximum amount of expenditure which qualifies for tax relief is €30,000 (pre-VAT). Ensure that your local property tax and household charge are up to date when you claim this tax relief.

Don't forget, the costs you incur on the rental property that are not recoverable under the HRI scheme should be allowable as a tax deduction against your rental income, either in full for the year in question, or as a capital allowance spread out over eight years - depending on the nature of the cost.

QUESTION: We are a married couple in our 70s, with one son. We are planning to pass our family home to him under our will but we are concerned that he will have to pay a significant inheritance tax bill as a result. A house down the road sold for €750,000 recently and we understand that he can only inherit €225,000 tax-free. Is there anything we can do about his potential tax liability? We don't want him to have to sell the house.

John and Una,

Blackrock, Co Dublin

OONAGH SAYS: This is a common issue we are encountering, particularly in areas where property is showing signs of recovery, and house values are rising.

You have not indicated your son's circumstances - that is, whether he is married or single, and whether he is living with you or in a property of his own.

There is a dwelling house exemption relief whereby he could inherit the property tax-free from you (and without utilising his tax-free exemption threshold of €225,000), but there are criteria that must be met, including him living in the property for three years before the inheritance and six years after. In addition, he must also not own a property himself. This may or may not work depending on personal circumstances but it can be a very valuable tax relief. If you are contemplating this option, I would suggest that you get advice from an accountant or tax advisor to ensure that you all understand and meet the necessary requirements.

If this is not a viable solution, have you considered taking out a specific life assurance policy to cover the tax bill?

Under these policies, known as 'section 72' policies (previously 'section 60'), when the claim is paid out after your death, the proceeds can be passed to your son tax-free, as long as they are used to pay the inheritance tax liability.

So, for example, if you expected the inheritance tax liability to be €170,000, and took out a policy for this amount, this payout of €170,000, although a sizeable asset, can be passed from your estate to your son tax-free when it is used by him to pay his inheritance tax.

QUESTION: My mum is a widow and she wants to give me, my wife and two kids €3,000 each. To ensure we don't get hit for gift tax, does she have to give it as four separate cheques - or can it just be one to me and Revenue will accept this for the four of us?

Douglas, Kinsale, Co Cork

OONAGH SAYS: You can have one cheque, or four individual cheques. In either instance, we would normally recommend an accompanying letter from your parent to the recipient specifying who the cheque(s) are for, and explaining the reason for the cheques - for example, that they are a gift of €3,000 each from her to you and the other family members. This letter should be retained to be provided to Revenue if required.

Oonagh Casey Grehan is tax partner with Fagan & Associates

Email your questions to lmcbride@independent.ie or write to 'Your Questions, The Sunday Independent Business Section, 27-32 Talbot Street, Dublin 1'.

While we will endeavour to place your questions with the most appropriate expert to answer your query, this column is a reader service and is not intended to replace professional advice.