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

Incentives, awards and prizes

Incentives, awards and prizesIntroduction ― incentives, awards and prizesEmployers may use a variety of methods to reward and encourage employees in their work. These are commonly known as incentives, awards or prizes. For the purposes of this note, the term ‘award’ will be used to cover all

14 Jul 2020 11:57 | Produced by Tolley Read more Read more

Maintenance payments

Maintenance paymentsMaintenance payments are payments made by a taxpayer to their former or separated spouse / civil partner for the maintenance of that person or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the

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

Entity classification

Entity classificationImplications of entity classificationIf a subsidiary is established, it is important to determine how it will be treated for UK tax purposes as this will determine the basis on which it is taxed. A subsidiary may either be transparent (like a partnership, where the individual

14 Jul 2020 11:37 | Produced by Tolley Read more Read more