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Election for rent-a-room relief not to apply
Where you let part of your home or all of it if you are temporarily absent and do not have a new home, you are entitled to rent-a-room relief. The relief is given automatically if your total income from the property is no more than £7,500 in a tax year. The relief is not advantageous where you make a loss from the letting and it can be discaimed by making an election.
Amount of the relief
Where you own the property jointly with one or more other individuals rent-a-room relief is reduced from £7,500 to £3,750 per owner.
Where the relief applies you are not entitled to deduct other expenses related to renting the property, e.g. repairs and maintenance.
Making the election
You can elect for rent-a-room relief not to apply to income for a tax year. This means that instead you can claim the actual expenses you have incurred. An election would be worthwhile where your running costs (including loan or mortgage interest) for a year exceed the rent-a-room amount.
An election must be made by the second 31 January following the end of the tax year you wish it to apply for. For example, if you wanted the relief not to apply to 2022/23, you have until 31 January 2025 to make the election. You can withdraw an election within the same time limit.
A claim can be made as part of submitting your self-assessment tax return or it can be made separately, providing it is within the time limit.
