Income Tax (Trading and Other Income) Act 2005 section 786

Meaning of "rent-a-room receipts"

Section 786 defines what qualifies as "rent-a-room receipts" for the purposes of the rent-a-room relief scheme, including the conditions that must be met and the relevant income periods.

• Rent-a-room receipts are income from letting furnished accommodation in a UK residence that is the individual's only or main home, including payments for related goods and services such as meals, cleaning and laundry
• The receipts must accrue (or, where the cash basis applies, be received) during the relevant income period and would otherwise be taxable as trading income, UK property business income, or miscellaneous income
• The income period depends on how the income is taxed: for trading income it follows the basis period for the tax year; for property income it runs from the later of the start of the tax year or the start of the letting to the earlier of the end of the tax year or the end of the letting
• Where a trade or UK property business uses the cash basis of accounting, capital receipts brought into account under the cash basis rules are also treated as rent-a-room receipts