Principal private residence relief when letting rooms out

Principal private residence relief when letting...

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I understand that when rooms in someone's home are let out that part of the house does not qualify for principal private residence relief.   How is the taxable gain calculated?   Are there any tax planning considerations?

To give an example,  Someone buys a 3 bedroom semi: they use the largest bedroom themselves and the middle sized and box room are rented out.   

How is tax on the gain calculated?

In practice tenants would have use of the kitchen, bathroom and possibly the lounge areas. Are there any particular points to consider when drafting the tenancy agreements?

I

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By MJShone
21st Nov 2011 12:02

If one lodger, no restriction, but you have two...

http://www.hmrc.gov.uk/manuals/cgmanual/CG64702.htm

 

You'd also have to take lettings relief into account - so you mgiht find you had no gain anyway.

 

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