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Tax question lodger plus buy to let
padington
Posts: 3,121 Forumite
Does anyone know, if you have a lodger in your main residential house plus a buy to let flat, do you get the lodger tax allowance plus the 10k buy to let allowance as well ?
Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.
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Comments
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Capital gains tax?
Each asset is assessed for capital gains tax when sold and you get and exemption in the year you realise your gains.
Income tax?
Rent a room allows you to rent a room for a certain amount each year without the need to report your income the to the HMRC.
You need to report all profit from your flat to the HMRC.:footie:
Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
Capital gains tax?
Each asset is assessed for capital gains tax when sold and you get and exemption in the year you realise your gains.
Income tax?
Rent a room allows you to rent a room for a certain amount each year without the need to report your income the to the HMRC.
You need to report all profit from your flat to the HMRC.
Sorry I'm asking about income tax, can you enjoy the lodger tax exemption (7.5k?) plus the buy to let tax exemption ( 10k ) at the same time.Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.0 -
Sorry I'm asking about income tax, can you enjoy the lodger tax exemption (7.5k?) plus the buy to let tax exemption ( 10k ) at the same time.
On your residence you can get Rent A Room allowance up to max 4250 or total lodger rent, whichever is lower.
There is no such thing as an exemption or allowance on the BTL.
If your lodger rent does not reach the 4250 limit you cannot mix income from the BTL. They need to be accounted separately.0 -
Do you have income from any sources other than the lodger and the BTL?0
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There is no £10k B2L allowance.
There is however a general income tax up-to £10,600 no tax band - see
https://www.gov.uk/income-tax-rates/current-rates-and-allowances
Even if your property income & total income is/are below £10,600 you should still declare property income via. SA property pages or....
a) You may be missing out of saving money later (carried forward losses..)
b) Those nice people at HMRC may fine you for not declaring....0 -
Do you have income from any sources other than the lodger and the BTL?
Yes, day job 32k, lodger 8k buy to let 10k. Trying to work out roughly how much the tax man is going to want ( should I go down that road ).Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.0 -
Yes, day job 32k, lodger 8k buy to let 10k. Trying to work out roughly how much the tax man is going to want ( should I go down that road ).
What about expenses?
As you have £8,000 lodger income you might be better opting out of the rent a room scheme and claiming actual expenses incurred....i.e half your mortgage interest, half the bills etc.:footie: Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
You must declare that £18k rental income then: Like all decent British citizens...
How long have you been renting the B2L & how long had a lodger & have you ever declared either??
My views on tax cheats are the same as those on benefit cheats.... (I make no suggestion that you are either...)
Cheer & best wishes to all!0 -
There is no such thing as a £10k BTL allowance. If you think there is, you are under-declaring and owe HMRC money. I assume you're also aware about the forthcoming reductions to BTL mortgage interest relief? If not, you really need to educate yourself and fast.0
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rinkydinkpanther wrote: »There is no such thing as a £10k BTL allowance. If you think there is, you are under-declaring and owe HMRC money. I assume you're also aware about the forthcoming reductions to BTL mortgage interest relief? If not, you really need to educate yourself and fast.
You cant undeclare on money not earnt. I'm seeking very simple rough advice to pen a few ideas together. I've never not paid my tax owed. Hence my advance questioning.Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.0
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