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Rent-a-Room question
jimbo_89
Posts: 7 Forumite
I am about to buy a property in the UK with a mortgage. My partner will be living with me at the property but as a lodger/ occupier, basically their name will not be on the mortgage or the titles.
Can I get some financial support from them under the Rent a Room scheme towards a tax-free limit of £7500? I will be living in the house as well of course and will be providing more than one furnished rooms.
And also, if the above is possible, does their share of payments towards bills, etc. count towards the £7500/ year allowance?
If my income from RaR is below £7500 is there any action I should take?
Many thanks in advance for any help!
If my income from RaR is below £7500 is there any action I should take?
Many thanks in advance for any help!
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Comments
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A partner can not be a lodger. Lodgers should never share your bed or any other personal items.
Any language construct that forces such insanity in this case should be abandoned without regrets. –
Erik Aronesty, 2014
Treasure the moments that you have. Savour them for as long as you can for they will never come back again.2 -
If your lodger were to share your bed, that would constitute a rental payment in kind.
I don't know the going rate: £100 ph?
Post 10: Lodgers: advice & links for landlords & lodgers
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Why is will your partner’s name not be on the mortgage or deeds if they will be helping to pay off the mortgage whilst you live as a single household? Is your partner’s name Roger? Will you also be using these furnished rooms that you provide? Will Roger have his own room that you do not use? So many questions!jimbo_89 said:I am about to buy a property in the UK with a mortgage. My partner will be living with me at the property but as a lodger/ occupier, basically their name will not be on the mortgage or the titles.Can I get some financial support from them under the Rent a Room scheme towards a tax-free limit of £7500? I will be living in the house as well of course and will be providing more than one furnished rooms.And also, if the above is possible, does their share of payments towards bills, etc. count towards the £7500/ year allowance?
If my income from RaR is below £7500 is there any action I should take?
Many thanks in advance for any help!0 -
The Rent e Room allowance is the amount you can receive in rent , from a lodger, without paying tax on that money..
Will you be declaring the money you receive from your 'lodger' to HMRC as income?
Rent a Room does not pay you any money.0 -
You may be misunderstanding the different ways people can share accommodation with homeowners. A friend (or more likely a stranger) can be a lodger. If they pay up to the threshold but not a penny more, I'm not sure you even have to tell HMRC.
A family member ( by blood or partnership/marriage) is different. They will make their contribution to bills which is sometimes known colloquially as their "keep".
This is to ensure you are not losing money by them being there but it is usually set at a low rate to ensure you ware not exploiting them or profiting or enriching yourself at their expense.
I don't think there's any paperwork for this.
If you formally accept money from them at a rate much higher than their bills would require then that might be interpretable as assisting with mortgage payments.
That would be a very brave thing for you to do, as this may lead to them having some claims on the value of the property.
I very much think you need to pause and think again before launching into this.There is no honour to be had in not knowing a thing that can be known - Danny Baker2 -
Thank you for your response and time.zagubov said:You may be misunderstanding the different ways people can share accommodation with homeowners. A friend (or more likely a stranger) can be a lodger. If they pay up to the threshold but not a penny more, I'm not sure you even have to tell HMRC.
A family member ( by blood or partnership/marriage) is different. They will make their contribution to bills which is sometimes known colloquially as their "keep".
This is to ensure you are not losing money by them being there but it is usually set at a low rate to ensure you ware not exploiting them or profiting or enriching yourself at their expense.
I don't think there's any paperwork for this.
If you formally accept money from them at a rate much higher than their bills would require then that might be interpretable as assisting with mortgage payments.
That would be a very brave thing for you to do, as this may lead to them having some claims on the value of the property.
I very much think you need to pause and think again before launching into this.
In this case boyfriend/ girlfriend is not a tenant, not a lodger, so this is not a standard case.
The plan and agreement following some discussions is no equity on the property for my partner. I honestly think that's where family law and a cohabitation agreement may need to come in, to hopefully clarify that payments are not towards equity. Still not clear about tax.
My main question was about whether I could use the Rent a Room scheme and the tax allowance it offers for my case. It is now obvious to me this is not so straightforward as the RaR applies to lodgers.
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jimbo_89 said:
My main question was about whether I could use the Rent a Room scheme and the tax allowance it offers for my case. It is now obvious to me this is not so straightforward as the RaR applies to lodgers.zagubov said:You may be misunderstanding the different ways people can share accommodation with homeowners. A friend (or more likely a stranger) can be a lodger. If they pay up to the threshold but not a penny more, I'm not sure you even have to tell HMRC.
If you formally accept money from them at a rate much higher than their bills would require then that might be interpretable as assisting with mortgage payments.Your partner will be paying half the bills so it's nothing to do with Rent a Room or tax allowances; it's not income for you, it's your partner paying their share of everyday bills (excluding any mortgage) so there's no tax implications whatsoever.If things go pear-shaped in the future then what matters are the facts of who paid what; if your partner is contributing to the mortgage or home improvements on top of half the everyday bills like food, electric, heating etc. then they may well be able to make a claim against the property even if you have written agreements in place.
Every generation blames the one before...
Mike + The Mechanics - The Living Years2 -
I don't mind if you want to call it rent, additional contribution or whatever. There surely must be some sort of legal mechanism to ensure they cannot claim equity on the property in the future. Or at least I hope there is... cohabitation agreement, deed of trust or something else that canmake everything clear.MobileSaver said:jimbo_89 said:
My main question was about whether I could use the Rent a Room scheme and the tax allowance it offers for my case. It is now obvious to me this is not so straightforward as the RaR applies to lodgers.zagubov said:You may be misunderstanding the different ways people can share accommodation with homeowners. A friend (or more likely a stranger) can be a lodger. If they pay up to the threshold but not a penny more, I'm not sure you even have to tell HMRC.
If you formally accept money from them at a rate much higher than their bills would require then that might be interpretable as assisting with mortgage payments.Your partner will be paying half the bills so it's nothing to do with Rent a Room or tax allowances; it's not income for you, it's your partner paying their share of everyday bills (excluding any mortgage) so there's no tax implications whatsoever.If things go pear-shaped in the future then what matters are the facts of who paid what; if your partner is contributing to the mortgage or home improvements on top of half the everyday bills like food, electric, heating etc. then they may well be able to make a claim against the property even if you have written agreements in place.
What percentage of the rent/ contribution would be taxable is a separate story but probably linked to the above.1 -
Why shouldn’t a partner be able to claim equity if they’ve helped repay your mortgage?jimbo_89 said:
I don't mind if you want to call it rent, additional contribution or whatever. There surely must be some sort of legal mechanism to ensure they cannot claim equity on the property in the future. Or at least I hope there is... cohabitation agreement, deed of trust or something else that canmake everything clear.MobileSaver said:jimbo_89 said:
My main question was about whether I could use the Rent a Room scheme and the tax allowance it offers for my case. It is now obvious to me this is not so straightforward as the RaR applies to lodgers.zagubov said:You may be misunderstanding the different ways people can share accommodation with homeowners. A friend (or more likely a stranger) can be a lodger. If they pay up to the threshold but not a penny more, I'm not sure you even have to tell HMRC.
If you formally accept money from them at a rate much higher than their bills would require then that might be interpretable as assisting with mortgage payments.Your partner will be paying half the bills so it's nothing to do with Rent a Room or tax allowances; it's not income for you, it's your partner paying their share of everyday bills (excluding any mortgage) so there's no tax implications whatsoever.If things go pear-shaped in the future then what matters are the facts of who paid what; if your partner is contributing to the mortgage or home improvements on top of half the everyday bills like food, electric, heating etc. then they may well be able to make a claim against the property even if you have written agreements in place.
What percentage of the rent/ contribution would be taxable is a separate story but probably linked to the above.1 -
There was a fascinating thread recently written from the woman’s perspective in a situation like this, years down the line.Her partner’s refusal to marry and determination to make sure she had no claim on his property (aka their home), quite understandably led to deep unease on her behalf, and eventually to the end of their relationship.
If that’s the future you want, more power to you!
But otherwise why are you moving in with this person who either you don’t love or trust?1
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