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Claiming rent a room relief and property allowance

HMRC have confirmed that an individual can claim the property allowance for one property and rent a room relief for another.

If rent a room income is below £7,500*, this is very straightforward. In HMRC Forms mode, on page UKP1, tick box 4 (If you are claiming rent a room relief and your rents are £7,500* or less). In SimpleStep, go to Other Income > UK Property and Furnished Holiday lettings in the EEA and tick that you’re claiming rent a room relief and also tick that gross rents came to less than £7,500. No other entries are needed for the rent a room income and any other property income and the property allowance can be entered in the usual way.

If rent a room income exceeds £7,500*, in TaxCalc, please follow the steps below:

In HMRC Forms Mode:

  1. Go to UK Property, page 2
  2. In box 20 (Total rents and other income from property?), enter the rent a room income after deducting £7,500*, plus other rental income.
  3. In box 20.1 (Property income allowance) enter the property income allowance being claimed (property income allowance must not exceed the lower of the other property income and £1,000**)
  4. Leave box 37 (rent a room exempt amount) blank.

In SimpleStep:

  1. Go to Other Income
  2. UK Property and Furnished Holiday lettings in the EEA > Other rental income
  3. If you are pooling rental income from several properties, enter rental income for the rent a room property plus other property minus £7,500*. If you are entering income separately per property, repeat this for each source by creating a name for each.
  4. Enter the property allowance being claimed (only once if entering several properties).
  5. You do not need to make any entries in the rent a room section.

*  If the property is let jointly, the allowance is £3,750 per individual.

** If the property is let jointly, each individual can claim £1,000.