NEWTH TALKS TAX - JULY: Tax writer of the year John Newth solves your tax questions

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Buy to let properties
Martin enquired, on 25 July 2006 (157594), whether tax relief on mortgage intere

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Comments
Dougscott's picture

Rent-a-room moral dilemna?

Dougscott | | Permalink

Here's a question. You rent a room in your house to your 10 year old daughter for £4250 a year who then sub-lets the room to Z Company for £5000 per year. Z Company just happens to be 100% owned by yourself. Your daughter has no other income. No tax. What's your view?

Actual personal residence

Sherlock | | Permalink

I fear that sub-letting to the company disqualifies rent-a-room-relief, as the relief is for personal residential purposes, i.e. personal living, sleeping and eating.

If I am wrong, then I am sure that HMRC would find some way of attacking the scheme under 'unacceptable tax avoidance'.

Paula Sparrow's picture

Class 2 contributions?

Paula Sparrow | | Permalink

Does Sarah really mean Class 2? Her query does not mention the client being self employed, so she would not be entitled to pay Class 2.

Class 3 contributions may be appropriate, but it would be necessary to look at a pension forecast first to ascertain whether they were worthwhile.