We had a client recently who wanted to get builders in to add two separate studio rooms in his home with their own individual entrances, kitchen and bathrooms. Our client wanted to continue to live in the upper part of the house and wanted to know if he was able to claim rent a room tax relief.
This scheme only applies to landlords who let a furnished room to a lodger in their own home, or to those who run a guesthouse, or bed and breakfast.Short term lettings which could include those found on Airbnb are also covered. The first £7,500 earned from letting out rooms in these cases is completely tax free.
As our client wanted to create separate residences within his house and this would not be eligible. However, there is an exception if he were to let furnished accommodation in a self contained studio area/flat where the divisions of the rooms were temporary. There are no fast rules about what constitutes a temporary divison but as our client was wanting to install kitchens and bathrooms it will be hard to argue that the divided residences are actually temporary.