If you are thinking of working away from home for a while and taking in a lodger to look after the house and pay you some rent, HMRC says you can receive up to £7,500 per year tax free.

However, this tax relief is only available if the letting income is from the only or main residence. So if you are living in rented accommodation paid for by your employer the rent-a-room relief rules do not allow you to nominate which of two residences is your main one.

HMRC says this depends on how well established you are in the property, and if you are putting down roots or just waiting until you return to your main home. The amount of time spent at the residence is not necessarily taken into account but it can help if occupation lasts a long time.

Even if HMRC believed that the temporary accommodation was the main residence you may still be entitles to the relief. The property needs to be a main residence at any time during the ‘basis period’ for the letting income to quality. This period begins at the beginning of the tax year or, if later, when the letting begins, and ends on the last day of the tax year or, if earlier, when the letting income stops.

This is very confusing, so two excellent tips are:

  1. Allow the lodger to move in before you move into temporary accommodation so the rent-a-room relief applies for that tax year. Also, the relief will be available for the tax year in which you return to your property as long as you move back while the lodger is still there.

 

  1. Renting a room for a short time such as via Airbnb will usually qualify for the relief.

 

If you have any questions about this subject or you need reassurance speak to Vincent & Co on 01803 500500.