Rental Income from PPOR?

Hi everyone, just hoping to get some good advice here.

My situation:
I have managed to buy a house as a PPOR 6 months ago after saving up for some years. The thing is that I have been renting with 2 of my very good mates since my uni days prior to this and when I bought this house, I have asked them to move in with me until they can find/afford their own places.

One of them had bought a place of his own and moved out now.
One of them is still staying with me at the moment.

For the past 6 months, we have been sharing the utilities bills and some shared costs on the house. I don't charge them monthly rent (no contract whatsoever) but one of them just transferred a rather huge sum of money to my account because he feels bad that he is not paying rent for past 6 months.

Now, I am just wondering if this amount of money transferred will be considered as 'rental income'? He did put 'Rent' on the transaction description to my bank account. I understand he is doing this out of good intentions but how will this affect my tax position?

Do I need to declare that amount of rental income now?
Is this going to affect my CGT in the future?

Really do appreciate any sort of advice, I will be more than happy to transfer the amount of money back to him because I really do want to retain my CGT privileges as a PPOR.

 

Wow, doesn't he know about the 'cash' economy?

And how did he get your bank details anyway?

 

Yes it is rent
Yes it will affect CGT in the future.

 

What if the payment is reversed as an error?

 

There will be an evidentiary trail.

Reversing the transaction doesn't change the fact that the property is income producing.

 

We have been sharing the utilities bills so we all have each other's bank accounts details all the time.

Yes, I suspected so too. I am just in such a difficult position now that I am not really claiming any reductions but I am forfeiting my CGT privileges. What would be my best option now? Go full on for it to be an IP or just keep it as PPOR and give my friend a good lecture about this? How many percentage of the CGT will I be losing?

Even if I have no intentions of making it an income producing property? Can I return it and claim that it was an erroneous transaction? I suppose you are quite right, it would be difficult to explain to basically anyone once the trail is there.

 

But you are charging rent so this is taxable income.

If it was just sharing electricity bills it wouldnt be income though.