HM Treasury has published ‘Rent a room relief: summary of responses’ alongside draft legislation and a policy document. This confirms the retention of the relief and the introduction of a new shared occupancy condition.

Following the government’s Call for evidence, the Treasury has released its its response summary, alongside proposed new draft legislation which has been included in the Draft Finance Bill 2018-19, and published a policy paper on the changes.

The call for evidence aimed to establish how much Rent a room relief was used, particularly given the introduction of the new Trading and property allowance.

The call for evidence found that:

  • The relief is still popular
  • It is a simple relief that is easy to understand
  • Many would not rent out a room if it were not for the relief
  • Few were in favour of restricting the relief to short-term lets
  • Some felt that clarification was required with regards to letting entire properties and whether that could qualify.

In response to the call for evidence, the government will:

  • Keep the relief
  • Retain the current £7,500 relief level but keep this under review
  • To make it clear that the relief is only for those who are renting out part of the house they live in, a new ‘shared occupancy’ clause is included in the draft Finance Bill 2018-19:
    • The clause requires that the physical use of the furnished accommodation overlaps for all or part of the rental, with use of the residence as sleeping accommodation by the owner or a member of their household.
    • This will take effect from 6 April 2019.
  • This new clause effectively clarifies that rent a room relief is only available for cases where the owner shares the property with the lodger and that where the entire property is let, the Trading and property allowance is available.

Comments on the draft legislation are invited by 31 August 2018. The full response document can be found here and the draft Finance Bill here.


Rent a room

Allowances: Trading and Property

Rent A Room relief – call for evidence



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