Rent-a-Room Scheme - 2 rooms??

Old-man-still-learning

I am a 72 year old pensioner living in a mortgaged 2-bedroom maisonette which I am currently refurbishing/redeveloping to include a sizeable en-suite studio in the attic. Question: the government Rent-a-Room scheme advice page seems to refer to letting only one room - if I live in the studio in the attic, can I let both the existing bedrooms under the scheme? The total rent for both rooms would still be under the £7.5K limit. We would all still share the living room and kitchen although each room will have its own en-suite bathroom facilities.

G_M

Yes the scheme still applies provided the total income (rent, utilities, any other payment received) is within the limit.

The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.


You can let out as much of your home as you want.

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme



https://www.gov.uk/government/publications/rent-a-room-for-traders-hs223-self-assessment-helpsheet/hs223-rent-a-room-scheme-2017

Old-man-still-learning

Thanks G-M! That answers my question.


On a pedantic point of good English, surely it should be 'LET-a-room' scheme?


Who would pay rent for a room in their own property - that would be silly!


:rotfl:

00ec25

Old-man-still-learning wrote: »

On a pedantic point of good English, surely it should be 'LET-a-room' scheme?

indeed it should, but the civil service is now forced to pander to the lowest denominator in society so standards of English are not what they used to be.

You will also find many uses of the phrase "rent out" scattered throughout the .Gov website in an attempt to partially clarify precisely your distinction rather than, shock, horror, use the verb to let.

By the way, please be aware that the moment you take more than one lodger (as in headcount) you become liable to pay Capital Gains Tax when you eventually sell the property. This should not be a great concern however as you can claim extensive relief against the CGT which often results in the net taxable liability actually being zero and so nothing to pay.

in simple terms the formula is: A - B - C - D = net taxable gain
A = gross gain: selling price - original purchase - legal & estate agents costs of purchase and sale (- SDLT paid on purchase if applic)
B = Private Residence Relief (PRR): A x (period of time in months it was your main home without lodgers/ total ownership period) + final 18 months of ownership irrespective of who is there in that final period
C = letting relief (LR): which is the lowest of B above, or £40,000, or (A x period let excl. final 18 months /ownership period)
D = personal allowance - currently £11,300 at 17/18 rate

remember CGT is only payable on a gain, it is not payable on the total selling price!
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64702

https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet

G_M

Yeah but 'let a room' doesn't have that nice alliteration rolling off the tongue....

00ec25

G_M wrote: »

Yeah but 'let a room' doesn't have that nice alliteration rolling off the tongue....

true, but could I offer: lodger letting scheme?

although sadly that won't work as it wouldn't cover B&B scenarios