B6.605 Sums exceeding the individual's limit
The tax treatment below applies where an individual qualifies for rent-a-room relief in a particular year of assessment but the total rent-a-room amount exceeds his limit (see B6.603)1.
If the individual does not make an election under ITTOIA 2005, s 800 to apply the alternative method of calculating his profits for a particular year of assessment, the rent-a-room income will be taxed under the normal rules for either trading income, property business income or the residual charge rules in ITTOIA 2005, as appropriate. However, if the individual prefers, he may make an election for the alternative method of calculating his rent-a-room income2.
The alternative method of calculation
The broad effect of the legislation in ITTOIA 2005, ss 796–798 is that if the individual's rent-a-room receipts for the tax year are all derived from a single type of income ie it all arises from a single trade, or all from a UK property business, only the excess of the aggregate sums over the individual's limit
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