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  • FIRST POST
    • MarkyTe
    • By MarkyTe 5th Jan 18, 12:12 PM
    • 3Posts
    • 0Thanks
    MarkyTe
    Valid expenses when renting a room...
    • #1
    • 5th Jan 18, 12:12 PM
    Valid expenses when renting a room... 5th Jan 18 at 12:12 PM
    Hi everyone,

    I have a 2 bed flat which is mortgaged.

    I use one bedroom and let the other to a lodger.
    Iím completing my tax return and have 2 options:
    1) 1) Use the Ďrent a roomí scheme and £7500 of the rent received is tax free but I canít claim any expenses.
    2) 2) Donít use the Ďrent a roomí scheme and claim expenses against the rent received.


    Letís assume I choose option 2. My question then is:
    If I werenít living in the property and it were a buy-to-let, I could claim the mortgage interest as an expense, so...
    As the property is effectively shared 50/50 with the lodger, can I claim 50% of the mortgage interest (i.e. the lodgerís share) as an expense?


    I realise the tax laws on BTL mortgage interest change from next year but Iím just asking about this year for now.


    Thanks in advance!
Page 1
    • Jenniefour
    • By Jenniefour 5th Jan 18, 1:36 PM
    • 1,311 Posts
    • 1,425 Thanks
    Jenniefour
    • #2
    • 5th Jan 18, 1:36 PM
    • #2
    • 5th Jan 18, 1:36 PM
    Why make things hugely complicated? Use rent a room for tax purposes, you should be charging sufficient rent to more than cover expenses. No, you can't claim mortgage interest, it's your home, not a buy to let property.
    • MarkyTe
    • By MarkyTe 5th Jan 18, 2:07 PM
    • 3 Posts
    • 0 Thanks
    MarkyTe
    • #3
    • 5th Jan 18, 2:07 PM
    • #3
    • 5th Jan 18, 2:07 PM
    Thanks Jennyfour,
    Half the mortgage interest + expenses would have come to more than the £7500 rent a room allowance, hence the question. I thought it might be deductible as other bills covered by me would be 50% deductible (as i understand it at least) but if that doesn't extend to the interest payments, you're right, it's best to go with the rent a room option.
    Thanks again.
    • Comms69
    • By Comms69 5th Jan 18, 2:09 PM
    • 2,970 Posts
    • 2,939 Thanks
    Comms69
    • #4
    • 5th Jan 18, 2:09 PM
    • #4
    • 5th Jan 18, 2:09 PM
    Hi everyone,

    I have a 2 bed flat which is mortgaged.

    I use one bedroom and let the other to a lodger.
    Iím completing my tax return and have 2 options:
    1) 1) Use the Ďrent a roomí scheme and £7500 of the rent received is tax free but I canít claim any expenses.
    2) 2) Donít use the Ďrent a roomí scheme and claim expenses against the rent received.


    Letís assume I choose option 2. My question then is:
    If I werenít living in the property and it were a buy-to-let, I could claim the mortgage interest as an expense, so...
    As the property is effectively shared 50/50 with the lodger, can I claim 50% of the mortgage interest (i.e. the lodgerís share) as an expense?


    I realise the tax laws on BTL mortgage interest change from next year but Iím just asking about this year for now.


    Thanks in advance!
    Originally posted by MarkyTe


    No, because the expense would be there with or without the lodger being present.


    Expenses are in essence costs as a result of your 'business'.


    Why not just use rent a room?
    • MarkyTe
    • By MarkyTe 5th Jan 18, 3:23 PM
    • 3 Posts
    • 0 Thanks
    MarkyTe
    • #5
    • 5th Jan 18, 3:23 PM
    • #5
    • 5th Jan 18, 3:23 PM
    When you put it like that, it makes perfect sense.
    Filling in my return and using rent a room now!
    Thanks very much =)
    • sheramber
    • By sheramber 5th Jan 18, 4:49 PM
    • 4,776 Posts
    • 3,570 Thanks
    sheramber
    • #6
    • 5th Jan 18, 4:49 PM
    • #6
    • 5th Jan 18, 4:49 PM
    Since your query is about income tax you would be better posting on the cutting tax board
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