Rent-a-room relief

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Rent-a-room relief

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
imgtext

This guidance note explains the principles of rent-a-room relief and its impact on calculation and reporting of property income for individuals.

Rent-a-room relief provides exemptions and removes the requirement to notify for low levels of rental income from a lodger in an individual’s home. It also provides a simplified method of calculating profits where income exceeds a de minimis limit.

If the gross rents are less than £7,500 (£4,250 for tax years between 1997/98 and 2015/16), the income is ignored for income tax purposes, although this limit is halved if another person is also entitled to the income. For example, where a couple own the property jointly, the limit is reduced to £3,750 each, even if the income is not split equally.

The rent-a-room scheme is designed to apply where a lodger shares the taxpayer’s own home. It cannot be applied to rooms let as an office, or otherwise for business purposes, although this would not prevent the lodger from, say, being a student with an area set aside for study.

The scheme may be used for

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+
  • 17 Dec 2025 12:40

Popular Articles

Associated companies ― from 1 April 2023

Associated companies ― from 1 April 2023Implications of associated companiesFrom 1 April 2023, the rate of corporation tax that a company is subject to depends on the level of its augmented profits. The rate of tax is based on a comparison of the company’s augmented profits against the corporation

22 Mar 2021 10:21 | Produced by Tolley Read more Read more

Definition of a close company

Definition of a close companyThe detailed definition of a close company is set out below, but in summary the rules are targeted at those companies where the owners can manipulate the activities of the company to influence their own tax position. Therefore, broadly speaking, in most cases an

14 Jul 2020 11:24 | Produced by Tolley Read more Read more

Classes of NIC and who pays them

Classes of NIC and who pays themClass 1 NICClass 1 NIC is payable on earnings paid to an employed worker which derive from, or are treated as deriving from, an employed earner’s employment in the UK. There are two kinds of Class 1 NIC, primary contributions for which the employee is liable and

Read more Read more