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Rent a Room Scheme with a Partner - How does the tax calculated?

(3 Posts)
Cratos Sun 22-Jan-17 14:30:11

Hi All,
I wondered if you could help me please since I am a little confused.

If you have a shared property ownership with your partner/husband and you rent a room, how is the tax for rent a room calculated for the year ?

Assuming that Rent income is £10000 for the year 2015-2016
Tax free threshold is £4250
For each partner Tax free threshold is £2125
For each partner Rent Income is £5000 (half of the total income for the household)

One partner doesn't earn high enough to pay any tax.
The other partner pays 40% tax on Salary.

Then is it correct to say that high earning partner will pay 40% tax on £5000 income - £2125 = £2875 @ 40% = £1150

I would be grateful if anybody can share any light on this ? Thank you in advance for your time.

Nightmanagerfan Sun 22-Jan-17 14:47:31

The rent a room scheme allowance is now £7500 a year (from April 2016). Tax is therefore payable on the remainder. I don't know how it is calculated but I expect the non-tax paying partner could use some of their tax free allowance towards it.

Cratos Sun 22-Jan-17 14:58:58

Thank you very much

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