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  • FIRST POST
    • Aitken67
    • By Aitken67 7th Jan 18, 9:39 PM
    • 3Posts
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    Aitken67
    Tax impact of switching mid-year from letting a room to letting out whole flat
    • #1
    • 7th Jan 18, 9:39 PM
    Tax impact of switching mid-year from letting a room to letting out whole flat 7th Jan 18 at 9:39 PM
    Hello. I have a mortgaged two-bed flat. This tax year (17/18), I have been renting out a room to a lodger, income from which will be below the 7,500 rent-a-room threshold.
    However, I am possibly about to go abroad for work, and so will need to let the whole flat. If I let the whole flat in March, i.e. in this tax year, would that then invalidate the rent-a-room exemption? That is, would I then need to pay tax (less expenses) on the income I've had this year from my lodger?
    Any advice gratefully received! Thanks
Page 1
    • 00ec25
    • By 00ec25 7th Jan 18, 10:16 PM
    • 6,515 Posts
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    00ec25
    • #2
    • 7th Jan 18, 10:16 PM
    • #2
    • 7th Jan 18, 10:16 PM
    the rental income for the ENTIRE tax year falls within rent a room where you move out and leave the lodger behind in residence. You would only need to start the normal method (ie non RAR) from the start of 18/19 tax year

    read: https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4010

    the "basis period" means the tax year
    • simondm
    • By simondm 7th Jan 18, 10:48 PM
    • 27 Posts
    • 21 Thanks
    simondm
    • #3
    • 7th Jan 18, 10:48 PM
    • #3
    • 7th Jan 18, 10:48 PM
    I thought that you declare the total under rent-a-room would be declared independently, then declare the income and expenditure for the month after you move out in the rest of the income from property section on the tax return (e.g. mortgage interest for the last month or so only).

    The link above seems to describe the situation where you have a lodger at one property then move within the tax year to another property where you also have a lodger.

    I'm not 100% certain on this though, I tend to do my tax return close to deadline so can't remember exactly how it's laid out.
    • 00ec25
    • By 00ec25 8th Jan 18, 7:03 PM
    • 6,515 Posts
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    00ec25
    • #4
    • 8th Jan 18, 7:03 PM
    • #4
    • 8th Jan 18, 7:03 PM
    I'm not 100% certain on this though,.
    Originally posted by simondm
    indeed you are not, you are wrong.
    • Aitken67
    • By Aitken67 8th Jan 18, 8:27 PM
    • 3 Posts
    • 0 Thanks
    Aitken67
    • #5
    • 8th Jan 18, 8:27 PM
    • #5
    • 8th Jan 18, 8:27 PM
    the rental income for the ENTIRE tax year falls within rent a room where you move out and leave the lodger behind in residence. You would only need to start the normal method (ie non RAR) from the start of 18/19 tax year
    Originally posted by 00ec25
    Thank you very much. That HMRC link was incredibly helpful! To clarify - my current rent-a-room lodger will move out on 24th March. I will move out on 26th March. I then intend to let the entire flat to a different person, through a letting agent. If I let the flat on 30th March, would it mean:
    a) that the final week of the year would also be covered under rent-a-room; or
    b) I would need to declare the rental income for that week, but the income from my lodger would still be exempt if under the RAR threshold?

    Thanks!
    • simondm
    • By simondm 9th Jan 18, 3:22 PM
    • 27 Posts
    • 21 Thanks
    simondm
    • #6
    • 9th Jan 18, 3:22 PM
    • #6
    • 9th Jan 18, 3:22 PM
    indeed you are not, you are wrong.
    Originally posted by 00ec25
    Sorry, I should have realised that I shouldn't rely on logic where HMRC is concerned.

    This rule means that you could try to game the system by living in your rental property (as your main residence) for a short period at the beginning of the tax year then move out e.g. move into the property while refurbishing, source your tenant, live with them for a while, then leave.
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