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Rent a Room Scheme with a Partner - How does the tax calculated?

Started by BlueFlower, January 22, 2017, 02:51:12 PM

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BlueFlower

Hi All,
I am not very clear on How Rent a room scheme Tax is calculated if you have a partner/married who shares your house.  I wondered if you could help me please :

If you have a shared property ownership with your partner and you rent a room, how is the tax for rent a room calculated for the year ?

Assuming that Rent income is £10000 for the year 2015-2016
Tax free threshold is  £4250
For each partner Tax free threshold is £2125
For each partner Rent Income is £5000 (half of the total income for the household)

One partner doesn't earn high enough to pay any tax.
The other partner pays 40% tax on Salary.

Then is it correct to say that high earning partner will pay 40% tax on £5000 income - £2125 = £2875 @ 40% = £1150

I would be grateful if anybody can share any light on this ? Thank you in advance for your time.

David M

My understanding for rent is that it should be allocated to each party at the same proportion as their beneficial interest in the property so if it is 50/50 then there would be no chance of allowing your partner to take all the rent as his/her income. I am not an accountant but that's what mine told me.Makes sense I suppose.