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Rent a Room

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My client already has 2 rental properties for which annual tax returns are submitted.  He tells me that in Oct 2019 he took on a rent a room lodger paying £600/mth.  The accommodation is above a garage and consists of a bedroom and bathroom only.  The garage is a separate building from his house although all part of the same family home.  I spoke to HMRC and the lady I spoke to seemed a bit vague as to whether this set up was strictly rent a room etc.  Has any one got an opinion as to how I should treat the additional income?

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Scooby
By gainsborough
16th Jun 2020 08:24

See ITTOIA 2005 s787 (2) and also PIM4004 https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4004 re "temporary division". You may need some more information from your client to enable you to make a judgement.

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By Cat's whiskers
16th Jun 2020 11:05

I recall from a CIOT course that rent a room required use of the same front door. So I would say not rent a room would not apply in this case.

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By Ashford
17th Jun 2020 14:23

Thanks for the comment. In actual fact I finished up speaking to a tax inspector who said that given there is no kitchen in the accommodation and the lodger has to use the main home for cooking + the garage is part of the 'grounds', he was happy for it to be classed as 'rent a room'. As you can imagine, client very happy.

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