New announcement. Learn more

CHARTERED ACCOUNTANTS (ICAEW)

News and advice to help make your property business a success

LANDLORDS FINANCIAL BLOG

All

Landlords Tax Property Tax Landlords Tax Returns Landlords Accounts Property Tax Return Property Accounts Landlords Financial Landlords Accountant Tax Tax Returns VAT Chartered Accountants Online Accountant Online Bookkeeping Online Tax Returns Your Online Accountant Your Online Bookkeeper HMRC Businessadvice Expenses SDLT Accounting FHLs NIC Dividends Property Cashflow Holiday Lets Tax Investment Property Tax MTD PAYE Property Accountant Smallbusiness Tax Implications Tax Relief Businesstips Capital Gains Tax Cgt Employment Allowance Furnished Holiday Lettings Ihtexemptions Income Tax Inheritance Tax Making Tax Digital National Insurance Pension Relief Sole Trader Taxplanning Capital gains tax property Gifts ISA Landlord Repairs Partnership Property bookkeeper Property Letting Tax free income Taxreturn VAT invoice Agricultural Property Relief Allowable Business Expenses Annual Exempt Amount Bad Debt Tax Relief BADR Benefits Benefits in Kind Business Entertainment Business Expenses Business Rate Business tips Capital Allowances Capital Gains Cashbasis Child Benefit Commercial Property Compliance Deductibleexpenses Directors Loans Disincorporation Entertainment Finance Financialmanagement Flat Rate Scheme HMRC complaints Interest Interest Rates Lettings MakingTaxDigital Mileage Allowance Mobilephones MTD Update Overlaprelief Overseas properties Partnershipbusinesses Payrolling Pensioncontributions Postcessationrelief Ppr Property Business Property Company Tax Property Tax Deductible Expenses Propertyallowance Reimbursedexpenses Rent a Room Relief Rental Residence Relief Residential property gains Selfemployed Small Business Stamp duty TimetoPay VAT registration Working from home 2025-26 60 day capital gains limit Abolitionclass2 Accrualsbasis Acquisitions ADR Advisoryfuelrates AI AirBnB Alphabet shares Amap Annual Tax on Enveloped Dwellings Appeal APR Artificial intelligence Assessment Asset disposal Associated Company Associated Company Tax Rules ATED Autumnstatement Bad Debt Baddebts Badgesoftrade Beancounter Benefit Relief Breakeven Point Budget Business advice Business asset deferment Business coach Business Continuity Business Rates Business Rates Relief Businessgrowth Businesstypes Buy or Lease Equipment Buytolet Capital Allowances for Cars Capital Gain Capitalallowances Capitalexpenditure Car Capital Allowances Carry Back Losses Cash Change of Tax Basis ChatGPT CIS Scheme Class 2 NIC Class 3 NIC Common Tenant Companies Expenditure Companies House Company Account Deadlines Company Account Filing Company car Company Strike Off Company Tax Efficient Property Companyassociation Companyloanstaxfree Compulsory Strike Off Construction Industry Scheme Contacthmrc Contentmarketing Contributions Corporation Tax Losses Corporation Tax New Regime Corporation Tax Rates CorporationTax Costs Cryptocurrency Customerlistimplications Deductible Business Expenses Deductions Deferring NIC Demerger Depreciation Development Directors Directors NI Directorsloans Disallowable Business Expenses Discovery Disposals Dispute Resolution Dividend allowance Dividend Allowance Reduction Dividend Planning Dividendallowance DLA Domestic Items Tax Relief Dormantcompany Dwellings EIS Employ a worker Employee Discount Employee management Employeecompensationpayments EmployeeOwnershipTrust Employers NIC Endoflifeplanning Enquiry EnterpriseResourcePlanning Entrepreneurmindset Equity Expenses Allowed For Tax Extrabenefit Eyetests Flipping Formal Complaint Furnished Holiday Lets Tax Gift Aid Gift Allowance Growthhacks Help to pay tax bills HICBC HMO Licensing Fees Holdoverrelief Holiday Lets Holiday Lettings Tax Home responsibilities protection How to apply for a Business Loan How to Extract Profit Humour Hybrid Illegaldividends Income Income and Gains Inflationary Gains Influencers Inheritance Tax Nil Rate Band Interestrelief Interestrestriction Investing Investment Investment in Woodlands Invisible income Invoicing IR35 ITSA Joint Tenant Keypersoninsurance Landlords Self Assessment Late vat registration LBTT Leadgeneration Leadmagnet Leanbusinessmodel Lending Letting Agent Disbursements Letting Agent Recharres Lettings Relief Lifetime Limit Limitedcompany Liquidation Demerger Loan Loaninterest Long Lets Tax Longservice LTT Mainresidencerelief Managed Lets Management accounting Maritalhomedivorce Marriage allowance Marriageallowance Mileage payment Mileage Relief Minimumwage Mixedusesdlt Mortgage costs Mortgage Interest Relief New property Newcompanycarfuelrates Newnicrules NIC 2023 to 2024 NIC savings Nicdisregard Nicreduction NMW Nmwerrors Non Allowable Business Expenses Non-taxable Nudgeletter Off-payrolling benefits Optiontotaxvat Overpayment Relief Paperform Partnership schemes Parttime Patternofoccupancy PAYE by Direct Debit Payroll Penaltypoints Pension Payments Tax Relief Pensions Performance-reviews Periodofgrace Periodsofabsence Personal Allowance Personal Expenses Personal finance Personalallowance Personalguarantees Pretradingexpenses Profit Profit-and-loss ProfitAndLoss Property Allowance Property Development Company Property Incorporation Property Investment Company Property investor accounts Property investor tax tips Property Rental Business Property Trading Propertycompany PRR R40 Receipts Recharges by Estate Agents Refund Regularpayments Relief for additional expenses Relief for FHL Rent your drive Rentaroom Research & Devolopment Residentialsdlt Retail stock control Retainedprofits Revenue Room for rent tax Rti SA Salary Salary Sacrifice Savings SDLT changes Section 455 Tax Section455tax Selective Licences Landlords Self Assessment Self-employednic Selling Online Selling your Company Seperation Servicecharges Settlementslegislation Simplified Expenses Smallbiz Smallbusinessraterelief Software Spring Budget Staffparties Starting a business Student Loan Deductions SuccessJourney Surplus Cash Tax Allowance on Driveways Tax Allowances Tax bill Tax Break Tax Codes Tax Deadlines Tax Deductions Tax Filing Deadlines Tax Free Childcare Tax Free Health Tax on Company Vans Tax on Enveloped Dwellings Tax position Tax Refund Tax Return Tax tips for landlords Tax-free savings income Taxable Benefits Taxation Taxation of savings Taxbillpayments Taxconsequences Taxincentives Taxposition Taxpositionassets Taxrelief Taxreliefs Taxses Terminationpayments Tips Trade professional Trading losses Training Transfer Assets Transfer Assets Between Spouses Travel Uk Properties Umbrellacompany Undisclosedincome Unpaid Rent VAT Bad Debt Relief VAT Deadlines VAT Disbursements VAT flat rate scheme VAT Penalties VAT Reverse Charge Vatpenalties Vatregistered Vatregistrationthreshold Voluntary Class 2 National Insurance Wellbeing Year End

TAGS

Rent a Room Relief

July 19, 2018

If you rent a room out in your only or main residence, you can claim upto £7,500 per year tax free income, known as Rent a Room Relief.

A new "shared occupancy clause" is to be introduced which specifies that the owner be resident in the property, and physically present, for at least some part of the letting period. This new clause should ensure that the relief is returned to it's original purpose. This was to incentivise the letting of spare rooms and to ease the housing crisis.

This change in the rules is designed to prevent property owners from getting tax free rentals on what is essentially a bed and breakfast or holiday let business eg. AirBNB. Many property owners have been renting their homes out to holidaymakers, whilst they move out, and then claiming Rent a Room Tax Relief.

HMRC gives a couple of examples on how they expect the new rules to work.

Firstly a Landlord lets their home to a student for a specific period of time. The Landlord is occupying the house, along with the student, but then takes a holiday for a week. This income qualifies for the tax free allowance as there is a shared occupancy for part of the rental period.

Secondly a Landlord rents out their home, and moves out, say for example during a major golf tournament being held near to their home. As there is no shared occupancy the rent received is fully taxable and would not qualify for Rent a Room Relief.

Rent a Room Relief

AirBnB