Last year HMRC carried out a review of "rent a room" relief and it was proposed that the availability of this generous relief would be restricted to situations where the taxpayer was resident for at least part of the time when the “lodger” was paying rent.
Are you aware of the latest tax exemptions?
How the scheme works
The scheme currently exempts from tax gross rents up to £7,500 where rooms within the taxpayers’ main residence are rented out.
HMRC were concerned that the relief was being “abused” by letting out the entire property using websites such as Airbnb and living elsewhere temporarily whilst the tenants were in the property. An example would be renting out a house in south London during Wimbledon fortnight and potentially receiving up to £7,500 tax free.
Note that the Autumn Budget announced that the proposed restriction was not now being introduced.
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