Renting a room - tax implications

european_2

i wish!! :-)

00ec25

european wrote: »

I hadn't realised there was a difference in tax terms. It's actually a mix of a & b. There are three rooms in the house. My brother will be living elsewhere for the first year, so it will be me and two others. From then on, it will be my brother and I, plus one other.

OK so:
you will be the resident LL and they will be your lodgers , BUT brother will be a non resident LL and therefore they will be his tenants

Legally therefore your brother will have to comply with lots of legisaltion applicable to non resident LL eg: gas safety certificates and EPC.

Also you cannot use a standard AST as this assumes everyone is a tenant of a non resident LL, you will need a tenancy agreement drawn up specific to your mixed circumstances

as your brother is non resident he can claim all of his share of the non personal expenditure as a deduction from his share of the rental income , you, as you have now realised, cannot - see HMRC website here you really do need to see an accountant to get this right (and probabaly a lawyer for the tenancy agreement)

dealing with lodger tax is normally easy but not where, as you have done, you have a mix of owner types !!!

PS I would also draw your attention to the final section on that web page re your £15k of "repairs" : Exceptionally heavy expenses incurred on landlord’s own home