For many property owners the rental income will be tax free if it is within the £7,500 rent a room relief and will not even need to be reported. This applies where room(s) in the taxpayer’s main residence are rented out, typically to lodgers. Where the house is owned jointly, they would qualify for £3,750 each tax free.
This £7,500 exemption would also apply where the property owners are temporarily absent and rent out their property, for example a house in London SW19 during the Wimbledon fortnight.
A few years ago, it was proposed that such lettings would not qualify but the legislation was dropped, and the Capital Gains Tax lettings relief restriction was introduced in the latest Finance Act instead.
For more information on this topic or to discuss how we can help you effectively structure your finances for tax and save you money, contact Barrie Dunning your usual Beavis Morgan Partner.
Further reading: Taking a lodger? Don’t forget to claim “rent a room” relief