June 2023 to March 2024 exams Watch free ACCA TX lectures
5. Rent a Room relief If an individual lets a room or rooms, furnished, in his or her main residence as living
accommodation then gross rents up to £7,500 p.a. are exempt.
The exemption may be ignored if the tax payer wants to generate a loss where expenses exceed
income, or where actual expenses exceed £7,500.
If gross rent exceeds £7,500 p.a. the tax payer may choose to assess as follows:
(a)
Ordinary calculation
(b)
Alternative calculation (election)
The election must be made for 2022/23 by 31 January 2025 and stays in force until it is
revoked.
Example 4 Barbara rents out a room in her main residence. Gross rents received are £650 per month and annual
expenses amount to £1200 in 2022/23
Calculate Barbara’s Property Income assessment for 2022/23 and state the due date for any relevant election. 6. Lease premiums on grant of short lease (50 years or less) 6.1. Introduction (a)
When a tenant takes on a new lease he may be required to pay a one-o
ff
premium in addition
to the annual rent. If the lease is for less than 50 years, part of the premium is assessed on the
landlord as property income, the remainder is treated as a capital receipt.
(b)
The amount of the premium assessed as Property Income is:
Where:
P = total premium
n = duration of lease in years
Gross rent
X
Less: expenses
(X)
(X)
Property Income
X
Gross rent
X
Less: rent a room relief
(7,500)
Property Income
X
P
×
51 – n
50
