Principe private residence - lodgers free accomodation

PeterBalham

I live in a house and share with one lodger quite a large place in my road they go for about £1million,

I only have one lodger as the HMRC if I have two lodgers I would be liable to CGT on the rooms they would take up about 30% of the house.

I claim rent a room allowance and if I let out to another lodger would pay tax on all of this .

So I have one lodger as a calulation based on 5% per annum growth rate in house prices means I am worse off after tax when I sell say in 10 years time.

My question is that I sometimes help at a drop in and am thinking of offering free accomodation in return for cleaning so there would be three of us in the hoiuse?

Would that mean I loose part of my PPR?

le_loup

PeterBalham wrote: »

free accomodation in return for cleaning

A mutually exclusive comment!

jimmo

le_loup wrote: »

A mutually exclusive comment!

Exactly!

In one way or another you will be letting another room. See the final paragraph here.

http://www.hmrc.gov.uk/manuals/cgmanual/CG64713.htm

Randvegeta

offering free accomodation in return for cleaning

You're going about it all wrong. What you need to do is give free accommodation to someone out of the kindness of your own heart with no strings attached. If that person happens to be a 'clean freak' then everyone's a winner!

If that person happens to be a slob, you can kick them out! It's your house after all!

Wink wink

PeterBalham

I see where you are coming from randvegeta the person I am thinking about seems to be up for this without prompting , but I am lousy at telling untruthes so just one more question.

A friend of mine had two aupairs staying to look after his elderly mother and they worked 25 hours a week each and were paid £80 in pocket money they were there for about 4 years.

The house is probably worth about £2million massive place inDulwich and I imagine the purchase price was a tenth of that.

I presume the PPR was not effected by staff beeing there as this type fo ralationship is not uncommon is it the payment of "pocket money" typical in an aupair realtionship the reason it does not effect the PPR?

In essence they got free accomodation and £80 a week pocket money for 25 hours work.

Normally people have just one aupair for children but he needed 2 to cover 50 hours or so when he was at work and to help with hos mother

I claim the rent a room allowance and pay income tac on the excess over that.

If I had an "aupair" by any other name as well as a lodger surely this would not effect my PPR? Maybe even paying the person a small nominal anmount as well as getting free accomodation

Randvegeta

Unfortunately I have not brought my big book of TAX with me to Lithuania and I'm too lazy to look it up on HMRC's website. Perhaps I am wrong, so DO NOT take my word for it and by all means look this up yourself!

You may be able to 'give away' accommodation and avoid any extra taxes you may otherwise owe if renting out. But if you want them to clean, you could, I suppose, pay them for the cleaning services, or like au-pairs, give them 'pocket-money'. The only thing about 'pocket-money' and 'free' accommodation is that they have no real responsibility to do anything... But then again I suppose you don't HAVE to give them pocket money and you don't have to let them stay. I'm really not sure.

If you plan of giving some 'pocket money' to your guest, why not reduce the amount of money your lodger has to pay and have them pay the guest. You can to save on tax and everyone gets what they want

That is assuming any of this will actually fly.