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HMRC internal manual

Property Income Manual

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


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

Derek’s only residence until 10 December 2001 was Green Pastures in Woking.

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 2004.

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

During his absence he let Green Pastures via an agency to an unconnected person from 11 December 2001 to 30 April 2004.

He made no return visits home during the whole period.

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

The letting income is assessable under Schedule A and the basis periods are as follows:

2001-02 11 December 2001 to 5 April 2002
2002-03 6 April 2002 to 5 April 2003
2003-04 6 April 2003 to 5 April 2004
2004-05 6 April 2004 to 30 April 2004

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

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Example 2 - relief due

The facts are the same as in the previous example except that this time Derek lets Green Pastures directly to a distant relative, Robert, who has come with his family to this part of the country to continue his studies.

Derek therefore delays his departure by one week to 18 December 2001 and, he and his family having vacated the Los Angeles flat, also returns one week early on 19 May 2004 so that the two families can spend some time together. In addition, Derek returns with his family from America in the summers of 2002 and 2003 to spend a two-week holiday with Robert at Green Pastures.

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

Derek is entitled to rent-a-room relief for 2001-02 and 2004-05. 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, Green Pastures was Derek’s only residence.

Derek is not entitled to rent-a-room relief for 2002-03 and 2003-04, however. Although Derek was living in Green Pastures for two weeks in each of the basis periods for these years it is doubtful whether Green Pastures was his residence during these stays: he was merely visiting as a guest of Robert, who was legally entitled to exclusive use of the property during these periods. Even if, however, the property did become Derek’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.