Room Rental

Splodger64

My wife and I are renting out a room and want to limit our tax liability. We own the house jointly, and as my wife doesn't work, I wondered if all the income from the letting was in my wife's name we could avoid any tax liability?

DreamerV

You can rent out a spare room in your house under the rent a room scheme for up to £4250 tax free (including everything, bills, council tax etc. as far as I understand it). I'm guessing you bring in more than this?

noh

Splodger64 wrote: »

My wife and I are renting out a room and want to limit our tax liability. We own the house jointly, and as my wife doesn't work, I wondered if all the income from the letting was in my wife's name we could avoid any tax liability?

You probably have very little if any tax liability anyway. how much rent do you receive annually?
£4250 p.a. is tax free under the rent a room scheme.

http://www.hmrc.gov.uk/individuals/tmarent-a-room-scheme.shtml

diable

Don't tell anyone.

00ec25

the correct answer as CLEARLY stated on HMRC is that a jointly owned property means the RAR allowance is split 2125/2125 each

so you each can receive 2125 tax free. If the share is greater than that per person that you owe tax on the EXCESS over 2125 each
http://www.hmrc.gov.uk/manuals/pimmanual/pim4001.htm

by all means do not declare it. After all what the UK needs is more tax dodgers and benefit scroungers

Splodger64

Thanks for the replies, but do I have to do it through the HMRC Rent a Room scheme? Surely it can be run as an unrelated enterprise, entirely by my wife, with her taking all the income. And if that doesn't take her into the income levels for which tax is paid, then it is all legitimate, surely?

jimmo

No, you don’t have to use rent a room if you don’t want to.

No you cannot simply regard your wife as being entitled to the whole of the rental income. See Jointly owned property - husband & wife or civil partners towards the lower end of this link.

http://www.hmrc.gov.uk/manuals/pimmanual/PIM1030.htm

However, if she was running a b&b the answer would be different.