½Û×ÓÊÓƵ

Rent-a-room relief

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Rent-a-room relief

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
imgtext

This guidance note explains the principles of rent-a-room relief and its impact on calculation and reporting of property income for individuals.

Rent-a-room relief provides an exemptions and removes the requirement to notify for low levels of rental income from a lodger in an individual’s home. It also provides a simplified method of calculating profits where income exceeds a de-minims limit.

If the gross rents are less than £7,500 (£4,250 for tax years between 1997/98 and 2015/16), the income is ignored for income tax purposes, although this limit is halved if another person is also entitled to the income. For example, where a couple own the property jointly, the limit is reduced to £3,750 each, even if the income is not split equally.

The rent-a-room scheme is designed to apply where a lodger shares the taxpayer’s own home. It cannot be applied to rooms let as an office or otherwise for business purposes, although this would not prevent the lodger from, say, being a student with an area set aside for study.

The scheme may be used for a bed

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by
  • 27 Mar 2025 10:10

Popular Articles

Incentives, awards and prizes

Incentives, awards and prizesIntroduction ― incentives, awards and prizesEmployers may use a variety of methods to reward and encourage employees in their work. These are commonly known as incentives, awards or prizes. For the purposes of this note, the term ‘award’ will be used to cover all

14 Jul 2020 11:57 | Produced by Tolley Read more Read more

Class 4 national insurance contributions

Class 4 national insurance contributionsWhat is Class 4 NIC?Class 2 and Class 4 national insurance contributions (NIC) are paid by self-employed individuals and partners in a partnership on their profits arising within the UK. This guidance note considers Class 4 contributions. For Class 2

14 Jul 2020 11:13 | Produced by Tolley Read more Read more

BPR ― trading and investment businesses

BPR ― trading and investment businessesIntroductionThe basic qualification rules for business property relief (BPR) are illustrated in the Flowchart ― trading or investment business for BPR purposes.For an overview of BPR, see the BPR overview guidance note.Relevant business propertyThe main

14 Jul 2020 15:36 | Produced by Tolley Read more Read more