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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17645
Experience:  International tax
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Hello, I have two questions really. I own my 2 bed flat and

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I have two questions really. I own my 2 bed flat and currently rent out one room to a tenant. I have put the rent money I received as part of the Rent-A-Room scheme for 2013 taxes. However, my boyfriend is moving in soon and he will be "contributing to the mortgage" - will this be considered the same as official renting if we don't have a contract and do I have to pay tax on this?
Also, I have owned the flat for 2 years and paid tax on the rent. Do I need to worry about capital gains tax after 3 years of ownership?
Thank you very much in advance.

The sharing of expenses by family members does not amount to rent, where one person owns the property. This is not really covered specifically in the HMRC letting information. It may be then that an individual would look to the requirements for letting and if the situation does not meet those it is not a letting arrangement.
The rent-a-room scheme applies to ordinary lettings of living accommodation in the taxpayer’s own home. The letting is nto ordinary and the arrangement would not be offered to a stranger.
In the HMRC guidance for when to allow expenses , the HMRC adviced "If a room/flat is shared and a contribution is made towards the cost by a workmate this should be netted off against the claimed cost."
So they see the difference when it comes to claiming expenses and would not see a flatmate as a renting in th ededuction of espenses either.
About your second question and CGT:

If you've let out all or part of your home you may not get full Private Residence Relief when you sell or dispose of it. But you may get another relief known as 'Letting Relief'.

The maximum amount of Letting Relief due is the lower of:

  • £40,000
  • the amount of Private Residence Relief due
  • the amount of gain you've made on the let part of the property

Thank you for posting your very interesting question.

Customer: replied 4 years ago.


Thank you for your response. Could I just check I understand please?

My boyfriend is not a family member. However, if he does not sign a tenant contract, would that mean that I don't need to pay tax on the money he contributes? He is not written into my mortgage, I own the flat alone.

Secondly - so would I need to pay CGT on the rental income thusfar (i.e. what my tenant has paid for the past 1.5 years) again, although I've already paid 40% tax on it?


Thank you!

He would be a member of your household (not related) and not a person that is paying rent under contract to you.
The amount of relief you would be allowed for the CGT would work also with your Private residence relief. You woudl be allowed the Private relief on the portion that was your home and then the Letting Relief would cover the portion of any gain that you had when you sell for the portion or percentage of the home rented.
Customer: replied 4 years ago.

Thank you so much. Last clarification - so when I submit next year's taxes, do I just exclude the money I receive from boyfriend from it?

Yes you would, he is a flat mate and not a renter.
TaxRobin and other Tax Specialists are ready to help you
Customer: replied 4 years ago.

Thank you for your help, much appreciated.

You are most welcome.