£7,500 tax free, or your costs. Not both
Rent a Room or Let It Properly
Under the threshold there is nothing to report at all. Over it you choose, every year, between the excess with no expenses or the profit as usual.
Rent a Room or Let It Properly
The £7,500 threshold against declaring the profit, and which one leaves you with more.
How the choice works
Under the threshold the income is exempt and there is nothing to report. Over it you choose, every year, and you can change your mind from one year to the next.
Rent a Room means paying on the excess over £7,500 with no expenses at all. The normal method means receipts less expenses. Whichever is lower is the one to elect.
It only applies to furnished accommodation in your only or main home. A separate flat, or a property you do not live in, is an ordinary letting.
The threshold halves to £3,750 each where two people share the income, whatever the split between them.
Take the workbook
Both methods side by side, with the crossover point for your own costs.
Download the workbookFAQs
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