Lodger or Self Contained ?

Rickycowslip

We're thinking of taking a lodger. We could possibly convert part of the house to make a self-contained unit. Does anyone know the costs and benefits of making such a move, rather than non-self contained ? Impact on council tax, house insurance etc. Any advice much appreciated...

lynzpower

My understanding is that if oyu take a lodger you dont have to tell the taxman for income tax purposes. If you make a portion of your home self contained, I guess there will be issues with land registry about "addresses" Will the post go to the self contained portion for example? If so, you'll have to go through the rigmarrol of solicitors, as well as the builders. Work out the difference, and work out whether the building work will really bring in that much more to offset the costs. There may also be planning permisison issues with restructuring your home.

good luck

seabright

The IR have a "rent a room" scheme whereby you can rent a room (as the name suggests!) and not pay tax on the rent up to £4,250.

Very good website here: http://www.direct.gov.uk/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/TaxOnRentalIncomeArticles/fs/en?CONTENT_ID=4017804&chk=mGasop

You don't need to get the land registry/solcitors involved if you're not selling the "new" property to someone else, but if you rent it out under a tenancy or licence you may need to tell your lender.