Generate a Tax Free Income from your Spare Room or Annexe

Generate a Tax Free Income from your Spare Room or Annexe, SurreyLets explains;
Sally Asling, Director of SurreyLets a dedicated Letting Agent in East Horsley comments “With many people taking salary cuts and feeling the pinch at the moment, letting out a room in their house or letting out an annex may be the answer”

“Under the Rent-a-Room Scheme you can let out a room in your home providing that you earn no more than £4250.00, then this income is Tax Free. If your rental exceeds this amount then you can either pay tax on the excess or prepare a statement demonstrating the true rent less expenses such as the cost of extra heat / water etc"

More and more people are tuning into this and finding not only the added income beneficial, but for certain people it makes them feel more secure about their home, particularly if they were away a lot of the time or working full time in the day.

To claim the tax relief, you must occupy the home during the period the room is let and it must be a part of your home and not classed as a separate dwelling.

Sally does however point out that whilst the income is tax free and letting out the room may have benefits, it is important to be careful about who you let have a key to your home. “Take full references and a deposit – be sure who the person is and take copies of their passport / driving license. Have an Agreement drawn up detailing the areas your lodger may occupy, the date the rental is due, the notice period agreed and for what reason you may hold the deposit. To some extent, following a gut feeling is also critical, after all, they will be living in your home!”

SurreyLets can help Landlords wishing to Let a room in their home and will market the property, take references on your chosen tenant and assist you with the agreement for a small fixed fee normally equivalent to two weeks rental. For more information contact Sally on 01483 282470 or at Sally@surreylettingsandpropertymanagement.co.uk