the rules on sub letting/house sharing?

[unclemark123]

the scenario:
im still bloody waiting,but just about to move into a large semi.
its unclear at the mo if im going to convert it into 2 flats, but if i do i will probably keep them.
in the mean time, before i remortgage as btl's or anything, whats the rules on house sharing and tax?
i understand i can have 1 person to x amount tax free?

mark

[Eric Mc]

You need to clarify what you are doing.

My interpretation of what I THINK you said is that:

You are buying a semi-detached house.
It will be your main residence.
You plan to have one or two lodgers in the house to help affray the costs of ownership.

[unclemark123]

thats it eric for say the next 6 months anyway.

p.s thanks for all the advise you post

[Eric Mc]

Under the Rent a Room scheme, you can have income from a lodger(s) up to £4,250 in total without having to pay tax on that income. In fact, you don't even need to notify the Revenue, as long as the income stays below that level.

If your income from lodgers does exceed these values, you should return the full income received to HM Revenue and Customs as normal Rental Income. If you have to make a Rental Income return, you will also be allowed to offset allowable costs against the Rental Income to arrive at a Net Taxable Rental Income amount. To provide the necesary information you need to complete a Self Assessment tax return and the supplementary "Land and Property" pages.

Obviously, "Rent a Room" is the way to go to keep matters simple.

You may need to check with your mortgage lender regarding the situation with lodgers or sub-letting.

[unclemark123]

following on eric.... so £4250 from lodger/s.

how about my fiancee who lives with me. she currently gives me money towards the bills, is that part of the £4250 or seperate?

if it is part of the allowance, than can i legitimaly get her to pay some of the bills direcly instead of giving me money?

mark

[Eric Mc]

It's a moot point. Obviously, once you are married there is no problem.

If push comes to shove, fiancees, live-in girlfriends (or boyfriends!!!!!!!!) don't normally count as lodgers - especially for "Rent a Room".

You can see why the government prefer people to be married. It does make such relationship issues much simpler.