Partners Rental Income

TimmyTime_2

Hello all!

I have a query that I cant seem to find an answer for. I own a house and rent out a number of rooms to lodgers to cover my mortgage. My girlfriend has now moved in and we share a room, she wants to help with the bills and mortgage but... if she pays me any rental income I will have to declare it and pay tax on it right? This seems odd, can we share the money through a joint bank account? What are the options here? Obviously we dont want to pay tax when/if not necessary.

Look forwarded to hearing anyones thoughts on this!
Cheers

xylophone

Either she's a lodger and has the same rights, responsibilities, tenancy agreement etc as your other lodgers or you are a couple and you share expenses?
Is she paying rent or not?
http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_067362.pdf might be worth a read.

chrismac1

I'd settle for payment in kind - 3 or 4 times a night!

TimmyTime_2

Hey Xylophone,

We are a couple living together, she doesn't pay anything towards the mortgage or utility bills at the moment, she wants to though and i'd like her to help also.

I suppose the question is if you live with a partner and that partner helps you with part of your mortgage repayments is the money you receive from your partner liable for income tax in the same way that the money from my lodgers is?

chrismac1

Yes if it is rent. However, unlike other countries such as ireland there is no gift tax in the UK. So if she were to make a gift to you of money, there would be no tax. Prepare for gnashing of teeth and general wailing from the HMRC fans who post on here.

jimmo

Xylophone had it right in post #2.

I think its more a question of common sense rather than tax law. If a couple live together and share the costs of living together no-one is paying rent to the other are they?

The trouble is that you are very unlikely to find any form of official confirmation of the Income Tax situation from HMRC.

However, looking at other matters dealt with by HMRC there are (at least) 2 places where a “couple” is defined.

http://www.hmrc.gov.uk/manuals/tctmanual/TCTM09320.htm

http://www.hmrc.gov.uk/manuals/hipgtmanual/HiPGTM08020.htm

Whilst those links are nothing to do with Income Tax the definitions are very similar and you should be confident that HMRC would struggle to accuse you of not being a couple.

With apologies to Rudyard K

If you can fill your bed with a desirable woman

Yours is the earth and everything that’s in it.

And - which is more- you’ll be a man my son.

If you can do that and charge her rent

You’re a better man than I am, Gunga Din!