Income Tax (Trading and Other Income) Act 2005 section 784

Overview of Chapter 1

Section 784 provides an overview of the rent-a-room relief scheme, which offers income tax relief on earnings from letting furnished accommodation in an individual's only or main home.

• Rent-a-room relief applies to income from letting furnished accommodation in an individual's only or main residence.
• The form of relief available depends on whether the individual's total rent-a-room receipts exceed their personal limit.
• If receipts are within the limit, the income is fully exempt from income tax unless the individual elects otherwise.
• If receipts exceed the limit, the individual may elect to use an alternative method of calculating taxable profits by deducting the limit from gross receipts.