Rent a Room

AirBnB & Rent a Room

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An article in taxation magazine suggests that rent a room relief could possibly be claimed in respect of ad-hoc rental income. During 2015/16 a client rented their coastal Norfolk home for 2 weeks via AirBnB, whilst they went on holiday themselves. They received £2,000 in rental income which we declared on the 2015/16 tax returns as they were absent from the property. The property is obviuosly their main home both before and after the rental and we are now wondering if the income has been declared incorrectly due to possible rent a room relief. Any thoughts/sucesses with HMRC on this?

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By Harrison88
27th Feb 2017 09:26

You can use it as a B&B owner so not sure why it would be any different.

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

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Worm
By TheLambtonWorm
27th Feb 2017 09:30

I initially thought that the relief wouldn't apply, but ITTIOA2005 s786 (c) states that it needs to be their only or main residence, which it does appear to be.

http://www.legislation.gov.uk/ukpga/2005/5/section/790

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By Steve Kesby
27th Feb 2017 10:40

I'm not sure if you've seen my response to the Taxation Readers' Forum query concerned, which only appears in the online version, and links to an earlier query.

https://www.taxation.co.uk/Articles/2017/02/21/336051/readers-forum-new-...

Whilst I agree that rent-a-room relief ought to be available, on a straight read of the legislation, HMRC's view is that when you vacate your house and let the whole house to somebody else it ceases to be your main residence for the duration of the letting. That view isn't without merit where a third party has been granted exclusive use.

And even now that the rent-a-room limit is £7,500, it still isn't worth arguing with them.

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Replying to Steve Kesby:
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By BigBadWolf
27th Feb 2017 10:55

Does going on holiday constitute "Vacating" the house ... presumably they still had their possessions in the house ... and surely this was their PPR during that time

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Replying to BigBadWolf:
By Steve Kesby
27th Feb 2017 11:08

As you will have seen from reading the material in the link, I do not disagree with you. It is simply that HMRC do, and it's never going to be worthwhile arguing with them.

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