Tax implications of letting rooms in your main residence.

Apr 11, 2005 9 Replies

We have a large property in an area with a property shortage.



My son (11 years) wants to rent out some of our house - we don't want to have the hassle. I called the revenue a few mins ago and they are quite clear that if he were to let out the rooms he could earn up to about £4K pa without paying any tax.



I don't believe them - I think they'll class it as our income and tax us, then tax us again because we didn't declare it properly, then fine us about £2K for the privilege ( ... been there ... got the T shirt)



Advice sought.



PS - the money will be genuinely earned by him and be kept in a separate account. The rooms are of little use to us. I will encourage him to organise breakfast for those staying who will usually only stay Mon -> Fri (I nearly got caught in the past for unearned income when letting some rooms in my house many years ago - the revenue tried to class it as unearned income and get over 50% of it off me - let alone the fines - nightmare).



I think the advice you were given _is_ correct - I've read the same in numerous places all saying, as you've been told, around 4k before paying tax.

Why not? Go to :-

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-: and then read about Rent a Room relief.

Rent a Room Relief is currently 4250 p.a. (max) - and it's tax free.

Bitstring , from the wonderful person John said

Yeah, but I suspect that doesn't clearly spell out whether an 11 year old (?) -son can make the £4250 using rooms which actually belong to his parents at the time.

It isn't taxable income, so does it matter who it goes to? As long as you don't try having everyone in the family renting out a room.

The 4,250 pounds allowance is then split between them.

Have you looked on the IR website?

It wouldn't even matter if the father took the money directly then gave it to his son - or would that invoke inheritance tax shenanigans?!

Regular gifts out of income do not count for IHT.

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