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 Property Accounts Property Tax Return Landlords Accounts Chartered Accountants Online Accountant Online Bookkeeping Online Tax Returns Tax Returns Your Online Accountant Your Online Bookkeeper Businessadvice Accounting Tax Cashflow Smallbusiness Businesstips Property Accountant Taxplanning VAT Furnished Holiday Lettings Inheritance Tax Property Property bookkeeper Annual Exempt Amount Business Rate Capital Allowances Capital gains tax property Compliance Deductibleexpenses Employment Allowance Finance Financialmanagement Holiday Lets Tax Landlords Accountant Landlords Financial Making Tax Digital Mileage Allowance Mobilephones Overlaprelief Pension Ppr Property Company Tax Property Tax Deductible Expenses Rent a Room Relief SDLT Small Business Taxreturn TimetoPay VAT invoice 60 day capital gains limit Accrualsbasis Acquisitions Advisoryfuelrates AI AirBnB Allowable Business Expenses Alphabet shares Amap Annual Tax on Enveloped Dwellings Appeal Assessment Asset disposal Associated Company Associated Company Tax Rules 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 Expenses Business Rates Relief Business tips Businessgrowth Businesstypes Buy or Lease Equipment Buytolet Capital Allowances for Cars Capitalallowances Car Capital Allowances Carry Back Losses Cgt Change of Tax Basis ChatGPT 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 Corporation Tax Losses Corporation Tax New Regime Corporation Tax Rates CorporationTax Costs Cryptocurrency Deductible Business Expenses Depreciation Development Directors Directors Loans Directorsloans Disallowable Business Expenses Discovery Disincorporation Dividend allowance Dividend Allowance Reduction Dividend Planning Dividends DLA Domestic Items Tax Relief Dormantcompany Employee Discount Employee management Employeecompensationpayments EmployeeOwnershipTrust Endoflifeplanning Enquiry EnterpriseResourcePlanning Entrepreneurmindset Equity Expenses Expenses Allowed For Tax Eyetests FHLs Flipping Furnished Holiday Lets Tax Gift Aid Gifts 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 Ihtexemptions Illegaldividends Influencers Inheritance Tax Nil Rate Band Interestrestriction Investment Property Tax Joint Tenant Keypersoninsurance Landlord Repairs Landlords Self Assessment Late vat registration LBTT Leadgeneration Leadmagnet Leanbusinessmodel Letting Agent Disbursements Letting Agent Recharres Lettings Relief Limitedcompany Long Lets Tax Longservice LTT Mainresidencerelief MakingTaxDigital Managed Lets Management accounting Mileage payment Minimumwage Mixedusesdlt Mortgage costs Mortgage Interest Relief New property Newcompanycarfuelrates Newnicrules NIC 2023 to 2024 NIC savings Nmwerrors Non-taxable Optiontotaxvat Overpayment Relief Paperform Partnership Partnershipbusinesses Parttime Patternofoccupancy PAYE PAYE by Direct Debit Penaltypoints Pension Payments Tax Relief Performance-reviews Periodsofabsence Personal finance Personalallowance Personalguarantees Postcessationrelief Profit Profit-and-loss Property Allowance Property Development Company Property Incorporation Property Investment Company Property investor accounts Property investor tax tips Property Letting Property Rental Business Property Trading Propertyallowance Propertycompany Recharges by Estate Agents Regularpayments Reimbursedexpenses Rent your drive Rental Rentaroom Research & Devolopment Residence Relief Residential property gains Retail stock control Retainedprofits Room for rent tax SA Salary SDLT changes Section 455 Tax Selective Licences Landlords Self Assessment Self-employednic Selfemployed Seperation Servicecharges Settlementslegislation Simplified Expenses Smallbiz Smallbusinessraterelief Software Spring Budget Staffparties Stamp duty SuccessJourney Tax Allowance on Driveways Tax Allowances Tax Deadlines 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 Transfer Assets Transfer Assets Between Spouses Undisclosedincome Unpaid Rent VAT Bad Debt Relief VAT Deadlines VAT Disbursements VAT Penalties VAT registration Vatpenalties Vatregistered Vatregistrationthreshold Wellbeing

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