Rent a Room Relief

Poundstretcher_3

Calling all Schedule A tax experts...

When I owned my own house and rented out a room, I was entitled to rent-a-room relief on income from my lodger's rental to the tune of about £4,500 per annum.
Now, was it the house or me that had the relief available? Presumably it was me, because the house itself is not a taxpayer.
So, now that I live with my partner (we are not married), if we jointly buy a property and rent a room out to a lodger, are we each entitled to the full rent a room relief allowance or just one of us?
I ask because there is a possibility of us renting out more than one room.
Could one tenant pay me rent and the other tenant pay my partner rent and each of us claim rent a room relief on each income?

Many thanks,
Poundstretcher.

Rimo2021

Poundstretcher wrote: »

Calling all Schedule A tax experts...

When I owned my own house and rented out a room, I was entitled to rent-a-room relief on income from my lodger's rental to the tune of about £4,500 per annum.
Now, was it the house or me that had the relief available? Presumably it was me, because the house itself is not a taxpayer.
So, now that I live with my partner (we are not married), if we jointly buy a property and rent a room out to a lodger, are we each entitled to the full rent a room relief allowance or just one of us?
I ask because there is a possibility of us renting out more than one room.
Could one tenant pay me rent and the other tenant pay my partner rent and each of us claim rent a room relief on each income?

Many thanks,
Poundstretcher.

Yes if you're not married you can each claim the relief.

Poundstretcher_3

Great! It's good to know there are some tax perks by not getting hitched!

pusscat

Just to clarify.....Can you each claim the relief off just a single tennant?

Rimo2021

Poundstretcher wrote: »

Great! It's good to know there are some tax perks by not getting hitched!

Sorry - I think I made a mistake and you will only be entitled to claim half the relief each. See inland revenue's helpsheet IR223 for the correct information!

http://www.hmrc.gov.uk/helpsheets/ir223.pdf

Poundstretcher_3

pusscat wrote: »

Just to clarify.....Can you each claim the relief off just a single tennant?

Yes. What matters is the amount of rental income you derive from having a lodger, not how many lodgers you have.

So, if you rent out one room to one person and they pay you £400 a month for 12 months from April to March, during that tax year you will have earned £4800. You then take off the rent a room relief (say £4500) and you then only pay tax on the remaining £300.

If you rented four rooms out to 8 people, and each of those 8 people paid you £200 a month, your income would be £19,200 for the year, and you would pay tax on £14,700.

Hope that makes sense
Poundstretcher

pusscat

Thanks Poundstretcher - think I may have phrased my question badly......

What I mean is , if OH and I (who are not married but live in a jointly owned house as tennants in common) let out a room to someone for say £9000 per year, could we each claim relief on £4500 of it?

Or, alternativly, if we let out 2 rooms at £4500 each, could each of us claim one of the lodgers as our indivudual tax relief?

This would allow us in effect a £9k joint tax free income from letting out a room/s.

Does this make sense?

Thanks

Puss




Does that make sense

rosysparkle

You will only be able to claim half each: see http://www.hmrc.gov.uk/helpsheets/ir223.pdf

Edited to add ooops too slow! The link has already been posted. The link will tell you the rules.

deary65

That is an interesting question:
If two or more people have an interest in land as tenants in common, then they are co-owners of that land. They each have an identifiable share of the property, which is capable of being transferred to another party,or part thereof, and is inherited by the owner's estate if he dies. In principle, each of the tenants in common may be able to identify a specific part of the property which he `owns'.
In law i can see no reason why you cannot each claim relief,since the taxman speaks of “property”owned by you. Something for you to look in to certainly.

Ebany

The_link_posted_by_others wrote:

The limit of £4,250 is reduced to £2,125 if, during the basis period
for the year, someone else received income from letting
accommodation in the same property.

Seems pretty clear. You can only have half if you both want to claim - its all based on the property, and even if you co-own it, it's still only one property.

deary65

This depends how you define property, to a lay person this may mean a house, to a lawyer property is defined as something that is capable of being owned. And since tenants in common “own”divided shares in land they can do with what they want. Or in other words sell that interest or let it.