Sole trader - Rental income

Question 1

When is rent-a-room relief available?

Answer 1

If accommodation that has been let out is part of the taxpayer’s only or main domestic residence.

Question 2

What is the relief available from rent-a-room relief?

Answer 2

Gross annual rent of up to £7,500 is exempt from income tax.

Question 3

What are the two options if annual rent is more than £7,500? (Rent a room relief)

Answer 3

1) Apply normal property income rules
2) Taxed on rental income in excess of £7,500 (election)