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  • Tax

    Income tax from lodger

    I am considering letting my current home to lodgers when I relocate and buy a new home. My current home is mortgaged, but I can't currently sell. The new home will be a cash purchase and my main residence, which will be shared with lodgers and I will use the Rent a Room allowance on it. This is feasible and not part of the following questions.

    Question 1 - As far as I understand, and I'm not fully up to speed with S24, any income above the interest cost of the mortgage will be taxable. My total income will be somewhere between £20k and £25k so I may not even be liable to pay income tax, but I'm sure I will be required to complete a tax return, e.g.

    • Total Income £25k,
    • Personal Allowance £11.5k
    • RAR Allowance £7.5k
    • Mortgage Interest £6k
    • Taxable income £0k

    Question 2. My current, mortgaged property, is held as a joint tenancy and I plan to change it to tenants in common (divorce issues). This is good for planning my will and protecting 50% of the equity, but how does it effect the income from lodgers? Would this still be 100% my income to pay towards the joint mortgage or only 50%?

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    Re Q1, I rent out a house to tenants and have lodgers in my home. For the rental income from the house, I can offset the personal allowance and the mortgage interest, expenses etc. For the lodgers in my home I can claim the RAR allowance. I don't think you can claim mortgage interest on a house that you live in.

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    Thank you Gozo Girl, that makes complete sense. It does seem unlikely that I could claim mortgage relief AND have a legitimate lodger.

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    Do look up the guidelines on having tenants. You need to have gas certificates done etc

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    Sorry, I mean lodgers. You need gas certs then too.

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    Thanks again Gozo Girl, I already have a tenanted property, currently held in trust. I presume I am reasonably aware of current legislation as I find myself reminding the trustees and the letting agent of what is required!

    I'm struggling to understand the implications of changing my current home ownership from joint to 50/50, any thoughts would be appreciated.

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    Can't help you there, Gary as everything is in my name. I'm sure someone on here can.

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    if you move out your lodger becomes a Tenant

    and you become a Landlord


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    Learn Change and Adapt ?????


    DL, this is a debate for another thread, but my lodger wouldn't necessarily become a tenant.

    I would appreciate your views on the income and tax implications...

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    "" ....but my lodger wouldn't necessarily become a tenant...""


    If you move out, he will be your AST tenant:  (No point you saying "no" for whatever reason... Judge would ultimately decide, possibly at your criminal trial for illegal eviction...)

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    Theartfullodger, I may have misunderstood my options and the legal implications...

    I will have 2 houses, in different locations. I will retain a private room with my personal belongings in each and share with 2 other people in each. I will sleep/live at either house, depending on where I need/choose to be, the frequency may be relevant, so lets say at least 1 night per week but it may be 3 nights at 1 and 4 nights at the other. I can claim RAR allowance on my nominated main residence and expenses on my other residence. I can alternate this each year if I choose.

    Which home would have lodgers and which home would have tenants?

    Do you have any thoughts on the income or tax implications of changing my current home to tenants in common?

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