Income Tax (Trading and Other Income) Act 2005 section 794

Full rent-a-room relief: income chargeable under Chapter 8 of Part 5

Section 794 provides for full rent-a-room relief where the individual's rental income would otherwise be chargeable to income tax as miscellaneous income not charged under any other provision.

• This section applies where an individual has rent-a-room receipts that would otherwise be taxable as miscellaneous income under Chapter 8 of Part 5 of the Act.
• For each letting agreement that gives rise to such receipts, the net income (receipts less associated expenses) is treated as nil for tax purposes.
• The effect is that both the gross receipts and any related expenses are disregarded entirely, resulting in no taxable income from the arrangement.
• This relief applies on an agreement-by-agreement basis, so each separate letting arrangement is assessed individually.