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HMRC internal manual

Property Income Manual

Rent-a-room: going abroad and/or occupying job related accommodation

Summary

Taxpayers who go abroad to work and, in the meantime, let their UK homes are unlikely to qualify for rent-a-room relief during their absence. This is so even if the absence is intended to be temporary (for say 2 or 3 years) and they are to occupy accommodation abroad that they do not themselves own. The same principles apply to taxpayers who occupy job related accommodation.

Example 1 below deals with the most common situation where rent-a-room relief will not be due.

Example 2 deals with the exceptional situation where the taxpayer may still qualify for rent-a-room relief.

Example 1 - relief not due

Judah’s only residence until 10 December 2011 was Bramble Cottage in Devon.

On that date he was sent by his employer to assist in a computer marketing exercise in America for a period likely to last for two or three years.

He returned on 26 May 2014.

While he was in America he occupied a luxury flat in Los Angeles provided rent-free by his employer.

During his absence he let Bramble Cottage via an agency to an unconnected person from 11 December 2011 to 30 April 2014.

He made no return visits home during the whole period.

Rent-a-room relief is not available to Judah for any year.

The letting income is assessable as income from property and the basis periods are as follows:

2011-12 11 December 2011 to 5 April 2012
   
2012-13 6 April 2012 to 5 April 2013
2013-14 6 April 2013 to 5 April 2014
2014-15 6 April 2014 to 30 April 2014

 

At no time during any of these basis periods was Bramble Cottage, as a matter of fact, Judah’s only or main residence because he did not occupy the property as a residence at any time during these periods.

 

Example 2 - relief due

The facts are the same as in the previous example except that this time Judah lets Bramble Cottage directly to a distant relative, Qing, who has come with her family to this part of the country to continue her studies.

Judah therefore delays his departure by one week to 18 December 2011 and, he and his family having vacated the Los Angeles flat, also returns one week early on 19 May 2014 so that the two families can spend some time together. In addition, Judah returns with his family from America in the summers of 2012 and 2013 to spend a two-week holiday with Qing at Bramble Cottage.

The basis of assessment and the basis periods are as before.

Judah is entitled to rent-a-room relief for 2011-12 and 2014-15. This is because during each of the basis periods for these years of assessment there was a one-week period where as a matter of fact, Bramble Cottage was Judah’s only residence.

Judah is not entitled to rent-a-room relief for 2012-13 and 2013-14, however. Although Judah was living in Bramble Cottage for two weeks in each of the basis periods for these years it is doubtful whether Bramble Cottage was his residence during these stays: he was merely visiting as a guest of Qing, who was legally entitled to exclusive use of the property during these periods. Even if, however, the property did become Judah’s residence during the two-week holidays, we would consider that it was not his main residence, which remained the Los Angeles flat that was his real (albeit temporary) ‘home’ throughout his absence abroad.