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Where Taxpayers and Advisers Meet

AirBnB

ltd101
Posts:47
Joined:Sat Feb 16, 2013 9:54 am
AirBnB

Postby ltd101 » Sun Apr 27, 2014 7:26 am

Hi, my friend has moved into his girlfriends flat & has begun to rent his flat out in the UK on AirBnB. He rents this out in 'share' format ie whilst he is there & also in 'entire' form ie when he is not there.

He recently quizzed me on the tax implications of this & unfortunately it wasnt clear to me (I told him to speak to a specialist) but out of curiosity I also did some digging on the web & it amazed me how little had been written on this. Am i correct in thinking:

Any revenue earned when he is NOT staying in the flat should be taxed at his marginal rate?
Any revenue earned whilst he IS staying in the flat qualifies for £4,250 rent a room relief?

Tks, think this is one that a lot of people will be getting wrong

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm

Re: AirBnB

Postby section 44 » Tue Apr 29, 2014 1:38 pm

Rent a room relief only applies where the property is a person's only or main home.
my friend has moved into his girlfriends flat
It doesn't sound like his flat in the UK is his only or main home and there his letting business profits would be taxable, irrespective of whether or not he IS staying in the flat.

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Re: AirBnB

Postby King_Maker » Tue Apr 29, 2014 3:57 pm

How often does he stay in his own flat?

Where does his mail go to?

ltd101
Posts:47
Joined:Sat Feb 16, 2013 9:54 am

Re: AirBnB

Postby ltd101 » Tue Apr 29, 2014 7:32 pm

The flat that he rents out is his own primary residence with a residential mortgage. He stays at the primary residence a couple of night a week but also stays in his girlfriends rented flat on week nights as it's closer to his new work .

Any thoughts on how this should be taxed? Can he offset his mortgage costs ? Tks

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Re: AirBnB

Postby King_Maker » Tue Apr 29, 2014 8:03 pm

If his flat does still qualifies as his main or only residence, then Rent A Room Relief might apply.

Have you read HMRC's Property Income Manual on the subject?

http://www.hmrc.gov.uk/manuals/pimmanual/pim4001.htm

ltd101
Posts:47
Joined:Sat Feb 16, 2013 9:54 am

Re: AirBnB

Postby ltd101 » Tue Apr 29, 2014 10:26 pm

Thanks kingmaker I think this means that he is eligible for the full 4250 relief whether or he shares the property or he is absent. At least that is my interpretation, I will advise him to seek professional advice. Given it's continued growth, I am surprised Hmrc haven't addressed specific airbnb examples

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm

Re: AirBnB

Postby section 44 » Wed Apr 30, 2014 8:55 am

How do you reconcile these statements:
my friend has moved into his girlfriends flat
The flat that he rents out is his own primary residence
?

ltd101
Posts:47
Joined:Sat Feb 16, 2013 9:54 am

Re: AirBnB

Postby ltd101 » Wed Apr 30, 2014 10:52 pm

It's his primary residence that he is letting via airbnb whilst he is there at weekends. During the week he stays at his girlfriends rented flat as it's closer to his work

Tks a lot for your advice

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm

Re: AirBnB

Postby section 44 » Thu May 01, 2014 8:49 am

Doesn't sound like his primary residence. His primary residence sounds like his girlfriend's flat.

ltd101
Posts:47
Joined:Sat Feb 16, 2013 9:54 am

Re: AirBnB

Postby ltd101 » Thu May 01, 2014 12:59 pm

I will advise him to seek advice on this one . Tks a lot for thoughts


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