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

Inter-spouse transfer

Inter-spouse transferIntroductionWhen a chargeable asset is transferred between two spouses or civil partners, there is a disposal by the transferor spouse / civil partner and an acquisition by the transferee spouse / civil partner for capital gains tax purposes. For simplicity, spouses and civil

14 Jul 2020 12:01 | Produced by Tolley Read more Read more

Ministers of religion

Ministers of religionMost ministers of religion or members of the clergy are either office-holders or employees and so their earnings are taxable under ITEPA 2003 as employment income and are subject to Class 1 National Insurance.For the purposes of the tax system, a minister does not have to belong

14 Jul 2020 12:14 | Produced by Tolley Read more Read more

Income tax paid on behalf of employee

Income tax paid on behalf of employeeIntroductionEmployers may wish to make payments of employment income to an employee / director without the employee suffering a tax or NIC cost on that pay. In other words, the employer wants to pay an amount net of tax and NIC. In some instances, often with

14 Jul 2020 11:58 | Produced by Tolley in association with Paul Tew Read more Read more