Changes to HMRC rent a room tax relief

Changes to HMRC rent a room tax relief

Changes to HMRC rent a room tax relief

** now CANCELLED in the 2018 October Budget **

There is a very useful tax relief for people who rent out rooms in their own home – the first £7,500 of income is tax-free.

However, with the rise of many short-term letting websites HMRC is proposing to change the rules from 6th April 2019 so that these are not taken advantage of.

Going forwards, tax relief will only be available where the landlord is actually occupying the home for some or all of the time that it is let…

Meaning that, for example, renting out your whole house for people to use for a sporting event while you go on holiday will no longer qualify for the tax relief.

However, those who rent out spare rooms to lodgers or short-term holiday guests will not be affected.

Where the £7,500 rent-a-room relief is no longer available, there is also the option of using the £1,000 property allowance in cases where this is more beneficial than apportioned actual costs.

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