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rent-a-room or let a furnished room Self Assessment?
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OlderSaver
Posts: 18 Forumite
Hi,
Totally confused what situation I'm in.
My GF moved in last October and in Jan started paying me £350 a month for living in the house (on the 4th of the month so last tax year I was paid £1400).
The house is in my name only, with a mortgage in my name only and I pay all bills in my name (Council Tax - not reduced for single person as GF is in the house, water, gas/Elec, TV Broadband Telephone) so I wanted to know what to tell HMRC.
Am I renting a room? She has one room with a lot of her stuff in but we share a bedroom, so am I actually letting a furnished property, I have no idea??
Basically I want to know what I need to tell the tax man next year and if I continue to charge her £350 (she used to pay over £500 for a small 1 bed flat so the £350 is low for the area even for a shared house) do I need to register for rent a room, or do I need to just potentially lower then rent to make the total less that the allowance per year (I was told by hmrc it is £2500 but have read £4500 and £7500 somewhere) or add up all of the allowable expenses for the property and deduct that from the income and see if it is over £2500, if it is the latter what is allowable? I found this "gov.uk/renting-out-a-property/paying-tax" of which I think I can say the following are potentially allowable expenses:
-buildings and contents insurance
-interest on property loans
-maintenance and repairs to the property (but not improvements)
-utility bills, like gas, water and electricity
-Council Tax
-other direct costs of letting the property, like phone calls, stationery and advertising
Allowable expenses don’t include ‘capital expenditure’ - like buying a property or renovating it beyond repairs for wear and tear.
-Furnished residential lettings
You can claim 10% of the net rent as a ‘wear and tear allowance’ for furniture and equipment you provide with a furnished residential letting.
They state Net rent is the rent received, less any costs you pay that a tenant would usually pay, eg Council Tax.
So do I just add up all my bills (Can I include TV Broadband and telephone as utilities) half them and say that 1/2 are expenses as she uses 1/2 what I pay for?
This is so confusing.
Totally confused what situation I'm in.
My GF moved in last October and in Jan started paying me £350 a month for living in the house (on the 4th of the month so last tax year I was paid £1400).
The house is in my name only, with a mortgage in my name only and I pay all bills in my name (Council Tax - not reduced for single person as GF is in the house, water, gas/Elec, TV Broadband Telephone) so I wanted to know what to tell HMRC.
Am I renting a room? She has one room with a lot of her stuff in but we share a bedroom, so am I actually letting a furnished property, I have no idea??
Basically I want to know what I need to tell the tax man next year and if I continue to charge her £350 (she used to pay over £500 for a small 1 bed flat so the £350 is low for the area even for a shared house) do I need to register for rent a room, or do I need to just potentially lower then rent to make the total less that the allowance per year (I was told by hmrc it is £2500 but have read £4500 and £7500 somewhere) or add up all of the allowable expenses for the property and deduct that from the income and see if it is over £2500, if it is the latter what is allowable? I found this "gov.uk/renting-out-a-property/paying-tax" of which I think I can say the following are potentially allowable expenses:
-buildings and contents insurance
-interest on property loans
-maintenance and repairs to the property (but not improvements)
-utility bills, like gas, water and electricity
-Council Tax
-other direct costs of letting the property, like phone calls, stationery and advertising
Allowable expenses don’t include ‘capital expenditure’ - like buying a property or renovating it beyond repairs for wear and tear.
-Furnished residential lettings
You can claim 10% of the net rent as a ‘wear and tear allowance’ for furniture and equipment you provide with a furnished residential letting.
They state Net rent is the rent received, less any costs you pay that a tenant would usually pay, eg Council Tax.
So do I just add up all my bills (Can I include TV Broadband and telephone as utilities) half them and say that 1/2 are expenses as she uses 1/2 what I pay for?
This is so confusing.
0
Comments
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You are regarded as a couple (living as man and wife). Therefore she is not 'renting a room'.
She is, in fact, paying you her share of the household expenses.
There is absolutely no need to inform anyone of the situation.0 -
Ah ok, its strange as I made sure I said girlfriend when I called them to check. (I was also calling to tell them about my £20 of interest earned last year - they didn't care about that which is good)0
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Cue the comments about how expensive it is to be your girlfriend
0 -
Ha, well its not exactly cheap being her BF!0
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If you have to pay tax on your girlfriend, she's probably not your girlfriend...Mortgage
June 2016: £93,295
September 2021: £66,4900 -
pmlindyloo wrote: »You are regarded as a couple (living as man and wife). Therefore she is not 'renting a room'.
She is, in fact, paying you her share of the household expenses.
There is absolutely no need to inform anyone of the situation.
Does that not mean that she could potentially have a share in the property as she has contributed to the mortgage?0 -
if you want to treat her as a 'lodger', your tax allowance for rent-a-room on 15/16 tax year is £4250, if I remember correctly. From Apr 16 is £7500.
You don't need to inform HMRC as the money you received won't over the allowance.0 -
I was just looking at lawdonut
lawdonut.co.uk/law/personal-law/divorce-separation-cohabitation/cohabitation-and-common-law-marriage
It said:Moving in together makes no difference where taxes are concerned. They continue to be assessed in the same way as any other individuals. However, any benefits you claim will be assessed on the basis that you are a couple. This means that your partner's income will be taken into account and your entitlement to benefits may be reduced.
So do I need to tell HMRC or not?0 -
OlderSaver wrote: »I was just looking at lawdonut
lawdonut.co.uk/law/personal-law/divorce-separation-cohabitation/cohabitation-and-common-law-marriage
It said:
So do I need to tell HMRC or not?
No. As you aren't renting a room. You're living with your girlfriend. She contributes£350 towards bills rather than paying £350 rent to you.0 -
Turf her out & get a couple of girls who pay more, nearer market rate: More fun, more money... (unless you'd prefer males...)0
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