Rent a room scheme - two landlords

[neilsolaris]

Hi,

I'm seeking clarification on the following situation: Two people jointly own a property, but only one resides there. They are considering renting out a room under the Rent a Room scheme.

Can the non-resident owner claim 50% of the rent as a landlord and report this on their tax return, or is it only the resident owner who can do so?

If the non-resident owner cannot claim, would setting up a general partnership provide a solution?

Additionally, for normal lettings, landlords can typically claim expenses during vacant periods. Does the same rule apply to expenses under the Rent a Room scheme?

Thank you for your advice.

 

[DWS]

Not sure what you are asking to be honest,

Can the non-resident owner claim 50% of the rent as a landlord and report this on their tax return, or is it only the resident owner who can do so?

Do you mean 50% of rent a room relief?
Have you read the ‘eligibility’ for rent a room relief?
Are these friends or clients?

 

[neilsolaris]

Yes, I meant 50% of the rent-a-room relief. I've read through the eligibility criteria, but I'm still unsure, which is why I'm asking today. I'll review it again now.

They are friends—would that make a difference in the answer?!

 

[MyAccountantOnline]

Hi,

I'm seeking clarification on the following situation: Two people jointly own a property, but only one resides there. They are considering renting out a room under the Rent a Room scheme.

...

I stand to be corrected but I am of the understanding that Rent a Room is availiable for income from your own home. Therefore for the joint owner who doesn't reside there I dont believe it can be claimed.

 

[MyAccountantOnline]

Just checked the HMRC helpsheet for Rent a Room and the first two paragraphs state -

The Rent-a-Room Scheme allows owner occupiers and tenants to receive tax-free rental income if you provide furnished accommodation in your only or main home.

For the tax year 2023 to 2024, the annual Rent-a-Room limit is £7,500. This reduces to £3,750 if someone else receives income from letting accommodation in the same property, such as a joint owner. The limit is the same even if you let accommodation for less than 12 months.

Helpsheet - HS223

 

[DWS]

Yes, I meant 50% of the rent-a-room relief. I've read through the eligibility criteria, but I'm still unsure, which is why I'm asking today. I'll review it again now.

They are friends—would that make a difference in the answer?!

Well as friends I would suggest the best advice you should give is to tell them to seak professionally advice

 

[MyAccountantOnline]

Yes, I meant 50% of the rent-a-room relief. I've read through the eligibility criteria, but I'm still unsure, which is why I'm asking today. I'll review it again now.

They are friends—would that make a difference in the answer?!

No I dont believe it does as joint owners they will share the rent and the indiviual who lives in the property will be entitled to receive £3,750 tax free rental income for 23-24 (ie 1/2 of the £7,500 limit)

 

[neilsolaris]

I stand to be corrected but I am of the understanding that Rent a Room is availiable for income from your own home. Therefore for the joint owner who doesn't reside there I dont believe it can be claimed.

Many thanks for your help. I agree with your interpretation. I think only the one living there can make a claim.