Commentary on Sections Part 7: Income charged under this Act: rent-a-room and foster-care relief Overview
2921.The sections in this Part are based on section 59 of and Schedule 10 to F(No 2)A 1992. These provisions are entitled “Furnished Accommodation” in the source legislation but are commonly known as “rent-a-room”, the name adopted in this Act.
2922.“Rent-a-room” gives relief in one of two forms for householders who provide furnished accommodation in their homes for lodgers. One form is complete tax exemption for the rent, provided it does not exceed a certain level - the “full relief” form. If the rent does exceed that level the rent-a-room profit is taxable. But taxpayers can choose to have the profit calculated by deducting a fixed amount as expenses, rather than their actual expenses, if that is advantageous - the “alternative method of calculation” form of the relief.
2923.References to “profits or gains” in the source legislation which relate only to income are rewritten in this Chapter omitting the reference to “gains”. This continues the tidying up of such references started in section 46(3) of and Schedule 7 to FA 1998.