Rent a Room Scheme mid-year change

msralmjs

Hi

I had a flat with a lodger under the rent a room scheme til December, when the property became a tenancy. My questions are fairly simple i hope:
1) can i claim rent a room for part of the year, and then treat the rest of the year as a tenancy for tax purposes?
2) do i have to 'pro rata' the tax allowance for the 6 or so months the property was under rend a room? Or can i use the full allowance?

Thanks in advance

kinger101

Claim Rent a Room relief for the day up until the lodger became a tenant.

booksurr

you must pro rata the allowance,
technically the basis period of the source income (ie the rent a room rent) ceases at the point the lodger becomes a tenant and so RAR must be apportioned up to that point

http://www.hmrc.gov.uk/manuals/pimmanual/pim4001.htm#IDASPWRG
"The basis period cannot begin before the source comes into existence or continue after the source has ceased"

http://www.hmrc.gov.uk/manuals/pimmanual/PIM4010.htm
If, after the individual moves, the lodger is allowed the use of the whole house (whether or not extra payment is involved) you can accept that:
- the existing source continues,
- the basis period does not therefore end at the date of the extension of the occupation,
- the rent-a-room conditions are satisfied until the end of the basis period (but no longer)

msralmjs

thanks all

just to confirm that the lodger didn't stay on - it became a seperate tenancy, so apportionment etc seems to be the way forward! Thanks