Rent a Room and earn up to £4,250 tax free

You can receive up to £4,250 a year tax-free (£2,125 if letting jointly) by letting furnished rooms in your home. This is known as the Rent a Room scheme.

It doesn’t matter how much you earn from other sources – you still get the full tax-free amount.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804

In the current economic climate renting a room is becoming an increasing popular method for boosting income and there has been an increase of 52% in the number of new homeowners taking in lodgers in the past two years.

On average UK room Rent is £406 per month rising to £717 in London.

Accroding to www.spareroom.co.uk

So this could well be worth considering if you need extra cash.

steve@bicknells.net

 

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2 thoughts on “Rent a Room and earn up to £4,250 tax free

  1. I have told a client to buy houses for his children(over 18) to reduce his inheritance tax liability. They can rent them out and pay him rent for the rooms they use in his house as lodgers . This also means he can have upto the limit tax free . If he just bought the houses himself he would pay tax on the rent and still have the inheritance tax problem
    His children are at college so no income. They can use their allowance to cover any tax liability on the rental income.

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