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

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