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HMRC internal manual

Property Income Manual

HM Revenue & Customs
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Rent-a-room: building divided into separate residences


This page gives you guidance about whether the rent-a-room rules apply when a property has been divided up.

The definition of ‘residence’ in the Act

The definition is found in F2A92/SCH10/PARA7 (for years up to 2004-05) and ITTOIA05/S787 (for 2005-06 onwards). ‘Residence’ means:

  • a building, or part of a building, occupied or intended to be occupied as a separate residence,
  • a caravan,
  • a house-boat.

But a building, or part of a building, which is designed for permanent use as a single residence shall be treated as a single residence notwithstanding that it is temporarily divided into two or more parts which are occupied or intended to be occupied as separate residences.

The question that is likely to arise is whether some part of a house, for example a basement flat, is part of the taxpayer’s residence or is a separate residence.

Where an individual lets furnished accommodation in a self-contained flat in the individual’s only or main residence he or she is eligible for rent-a-room relief provided:

  • he or she is a qualifying individual (see PIM4001), and
  • the division of the residence into a self-contained unit is only temporary.

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Temporary division

Whether such a division is temporary is a question of fact. You should think about factors such as the following in considering it:

  • Would structural alterations be necessary to undo the division?
  • How long has the residence been divided?
  • How long is the division intended to continue?
  • Could possession of the flat be obtained separate from the property as a whole?
  • Is the flat separately supplied and metered for mains services?
  • Does the flat have its own unique postal address?
  • Does it have its own separate entry?
  • Would a mortgage lender be prepared to lend on the security of the separate flat?

This is not an exhaustive list of factors to be taken into account and it is not definitive. There may be others relevant to your case.

It is impossible to give any hard and fast rules that will provide a decision in all circumstances. The officer responsible for the case must decide each case on its own facts.

In disputed cases photographs will be essential and personal inspection of premises desirable. The guiding question is how confident would you be of being able to convince the Commissioners that, on a common sense interpretation of the available evidence, the division is not temporary.