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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have live in 2 houses - 2 to 3 nights per week in 1 and 4

Resolved Question:

I have live in 2 houses - 2 to 3 nights per week in 1 and 4 to 5 nights per week in the other. I plan to rent a room in the house I live in for 2 to 3 night - can I claim rent a room relief (about 4k per year?). I earn 70k per year so a lot of tax if not
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Whether you will get rent a room relief or not depends on whether you can convince HMRC that a house that you live in for 2 to 3 nights a week is your main residence as it says it needs to be here. If you don't have your post such as bills etc delivered to the 2 to 3 day a week property and the centre of your domestic life is in the other location, then I'm afraid you are on a sticky wicket.

I hope this helps but le let me know if you have any further questions.
Customer: replied 2 years ago.

my wife earns only 120 pounds per week. would we be able to book the income from the rental of the house as hers.

if so could we deduct for expenses and if so would I need to transfer all cash dealings into her name?

Expert:  TonyTax replied 2 years ago.
If the property is jointly owned by you and your wife, then the rental income is split on a 50:50 basis unless it is owned in propoerions other than 50:50 and HMRC are notified on form 17.

Take a look here for the types of expenses which can be claimed.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

this is great thanks. just 1 last clarification

the house is in my name but could I transfer it into my wife's name purly for the purposes of tax planning?

Expert:  TonyTax replied 2 years ago.

You can certainly do that. Transfers of assets between the parties to a marriage who are living together are tax neutral.

However, if the property in question is in your name only and it been your main residence, you may dilute or lose your entitlement to main residence relief and letting relief if it has been let by putting it in your wife's name and then selling it later on.

Customer: replied 2 years ago.

I have had the house for approx. 10 years and for the first 5 it was let using rent a room. for the last 5 years not let.

bought for 90k and probably worth 100k now

would transfer to my wife be a disposal or would she pay capital gains on difference between selling price and 90k

I do not have any other assets that are subject to cgt - all shares in sip or isa

Expert:  TonyTax replied 2 years ago.
Unless she acquires an interest in the property whilst it is your main home then she will not be entitled to any main residence relief. However, the inherent gain is only £10,000 which is less than the cuurent CGT exemption of £11,000.
Customer: replied 2 years ago.

if we were to sell the property and the gain was 20k could we make it 50 50 owned and again pay no tax. if so that all works out

Expert:  TonyTax replied 2 years ago.
That would work.

Part of your gain could be exempt under the main residence relief rules but you have another property so it depends which you claim to be your main home.