What is Rent a Room Relief?

This relief is for individuals who let furnished residential accommodation within their only or main home. The amount of income received must fall below the exemption limit to apply, currently £4,250 (£354 per month). The individual will be exempt from income tax on profits if the rent is below the limit.

However, the taxpayer can elect for the rent-a-room rules not to apply. In that case the usual balance of income less expenditure would be used. The taxpayer might want to do this, for example, where there was a loss.

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