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The current and continuing attractions of rent-a-room relief
KEY POINTS
- Rent-a-room relief is a genuine tax break.
- The relief covers rent of up to £4 250 a year.
- Expenses cannot be claimed with the relief.
- Claim the relief via the self-assessment return.
- Bed and breakfast income is covered.
Based on current bank and National Savings investment interest rates of about 1% one would need an investment of £425 000 to produce annual interest of £4 250 and even then the interest would be subject to tax in the hands of a taxpayer.
Those who are seeking to increase income during the current credit crunch might well consider the rent-a-room scheme which can yield annual tax-free income of £4 250.
This is equivalent to £7 083 before tax for a higher-rate taxpayer and £5 312...
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