PIM4485 | Property allowance: contents: examples: the exclusion from the property allowance of income satisfying the conditions for rent-a-room receipts

Shari has rent-a-room receipts of £5,000 in 2017-18. This is less than the rent-a-room limit for the year which is £7,500. Shari makes an election to disapply full rent-a-room relief. As such Condition A (ITTOIA05/S783BM (2)) is met. Shari is not eligible to use the property income allowance.

Rizalyn has rent-a-room receipts of £8,000 in 2017-18. This is more than the rent-a-room limit of £7,500 for the year. Rizalyn could elect to use the alternative method of rent-a-room relief to deduct the limit of £7,500 from the total rent-a-room receipts of £8,000, giving a residual £500 to be taxed as property income. However, Rizalyn doesn’t make the election and so Condition B (ITTOIA05/S783BM (3)) is met. Rizalyn is not eligible to use the property income allowance.