Rent-a-Room Scheme

If you own your own home or if you're a tenant for that matter, you are permitted to let furnished rooms in your home and receive income which will not be taxed. It's called the "Rent a Room" scheme. The scheme lets residents earn up to £7,500 a year tax free from letting out furnished accommodation in their home. The tax exemption is automatic if the resident earns less than £7,500.

As much of a home can be let out as the homeowner wants.

Those who can opt into the scheme are:

• Resident landlords, whether or not they own their own home
• Those who run a bed and breakfast or guest house

Further information on the Rent-a-room Scheme can be found via the Self Assessment helpsheet HS223.

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See also: Financial Services, Mortgages