Reply to: Having a paying lodger

[vetran]

You don't issue a 31 point list of demands as well do you per chance?

You suggesting SandyD doesn't like pork or heaters?

[northernladuk]

I think this applies only if one doesn't have other rented properties.

I would be careful with this thinking marlarky.

[Nixon Williams]

Dunno, someone told me that, but I guess they meant if you already have a second income.

Can an accountant clarify this please?

The £4,250 'rent a room' allowance is available if you let a room in your home, this is not affected if you rent another property out.

Alan

[SandyD]

Why? I did not think you got tax relief on a rented property except that expenditure on that property can be offset against income.

Dunno, someone told me that, but I guess they meant if you already have a second income.

Can an accountant clarify this please?

[d000hg]

I think this applies only if one doesn't have other rented properties.

Why? I did not think you got tax relief on a rented property except that expenditure on that property can be offset against income.

[NimbleJackAccounting]

Can you claim furniture when it is your house? I thought percentage wear and tear was the way to go, but not your own stuff? Interesting.

You don't issue a 31 point list of demands as well do you per chance?

I would go with the 10% wear and tear allowance instead of claiming for individual pieces of furniture supplied to the lodger. Although you can apportion other costs of the "rental business", e.g. electricity, cleaning, water rates, council tax, etc.

[NimbleJackAccounting]

Agree

I would advise anybody who is considering this to take some advice before taking any action.

Spliting the ownership of the home needs serious consideration, especially if the initial aim is to split a small amount of rental income from a lodger!

Alan

Absolutely agree - no substitute to discussing your specific case with a professional. However, election using form 17 is very common, and can save a decent amount of tax when used properly.

[northernladuk]

I have a couple of lodgers, the income helps when on the bench, at least I don't have to dip into the war chest. The income is also assessed against expenses, e.g. furniture/ agents fees etc etc

Can you claim furniture when it is your house? I thought percentage wear and tear was the way to go, but not your own stuff? Interesting.

You don't issue a 31 point list of demands as well do you per chance?

[SandyD]

I have a couple of lodgers, the income helps when on the bench, at least I don't have to dip into the war chest. The income is also assessed against expenses, e.g. furniture/ agents fees etc etc

[SandyD]

Assuming its less than £4250 its tax free.

The £4250 limit is for the house rather than per person though.

And round our neck of the woods you'll be hard pushed to get that on a room.

I think this applies only if one doesn't have other rented properties.

[Nixon Williams]

Rental income is normally taxed 50:50 when husband and wife jointly own property, but you can change this.

How do you do this?

Well between a husband and wife you can have have a simple legal document called a declaration of trust to alter the "beneficial ownership" to say 90% and 10%. Then you simply fill in HMRC Form 17 to let them know that you own property in unequal shares and therefore they should tax in such ratio.

Any typical high street solicitor can do the declaration of trust document for you. Oh and there will be no capital gains on the transfer between husband and wife.

I realise this may be purely academic as rent a room relief will cover the income in any case - but hope it helps.

I would advise anybody who is considering this to take some advice before taking any action.

Spliting the ownership of the home needs serious consideration, especially if the initial aim is to split a small amount of rental income from a lodger!

Alan

[NimbleJackAccounting]

You can split rent differently between spouses

Rental income is normally taxed 50:50 when husband and wife jointly own property, but you can change this.

How do you do this?

Well between a husband and wife you can have have a simple legal document called a declaration of trust to alter the "beneficial ownership" to say 90% and 10%. Then you simply fill in HMRC Form 17 to let them know that you own property in unequal shares and therefore they should tax in such ratio.

Any typical high street solicitor can do the declaration of trust document for you. Oh and there will be no capital gains on the transfer between husband and wife.

I realise this may be purely academic as rent a room relief will cover the income in any case - but hope it helps.

[d000hg]

Why not... We'd only have someone we know well.

[tarbera]

Quick question

Sounds like your not short of cash, why would you want a stranger roaming about your house ?

Just wondering encase I'm missing something or is lodger really hot

[Nixon Williams]

Although upto £4,250 per annum is tax free, you will need to ensure that you declare the rental income on your tax return and then also claim the relief, so that you are not taxed on it.

If the house is jointly owned with your partner/spouse, then the income would normally be split 50:50 and so would the relief, as the £4,250 is per property, not per lodger etc.