Rent A Room Tax Relief

Did you know that you can claim rent a room relief of £4250 per annum when you let out living accommodation in your only or main home?  This could be a long term rental or applied to bed and breakfast or guest house businesses too.  It is important that the room is for living accommodation for genuine lodgers and not used as an office for business purposes. 

You do not need to actually own the home yourself.  You could be subletting a room from a house you rent.

It would be worth doing a calculation to ascertain the most tax efficient way of managing your rental income.  The first option is to offset any relevant expenses incurred in letting the room out against your rental income and paying any income tax on any profit.  The second option is to claim rent a room relief against your income to calculate the profit. You need to be aware that all incidental income needs to be included in the calculation for rent a room relief eg contributions towards utility bills or payment for laundry, meals etc.

In an unusual set of circumstances it is possible to claim more than £4250 per annum per property.  If you have more than one person letting rooms in the house and they are all also living in the house as their main residence then each of these can claim £2125 rent a room relief.

We have many clients for whom we give advice regarding property, rental income etc. and would be happy to provide a fee free 30 minutes with anyone looking for assistance and advice in this area.