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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My wife and I rent a room out on airbnb. We made £7101 in the

Resolved Question:

My wife and I rent a room out on airbnb. We made £7101 in the last tax year. We will utilise the £4250 rent a room allowance leaving £2851 taxable. My wife and I jointly own the property which is our main and only residence. I am on higher tax rate (40%) and my wife is on lower (20%). What tax do we pay on the £2851? Can we assign it all to my wife to pay lower rate and thus minimising the tax we pay, or do i pay 40% on half and she pays 20% on half of the £2851?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Unless the property is owned in proportions other than 50:50 and you inform HMRC of that fact using a form 17, then the income should be split on a 50:basis. You will each pay tax at your respective rates on your respective shares of the income. On 50% of £2,851, you will pay tax of £570 and your wife will pay tax of £285.

I hope this clarifies your position. Let me know if you have any further questions.
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