Explanatory note

Chapter 1 of Part 7 of the Income Tax (Trading and Other Income) Act 2005 (c. 5) (“ITTOIA”) provides relief on income from the use of furnished accommodation in an individual’s only or main residence. The relief is referred to as “rent-a-room relief”. The form of relief depends on whether the individual’s total rent-a-room amount (as defined in section 788 ITTOIA) exceeds the individual’s rent-a-room limit for the tax year. Section 789 ITTOIA determines the individual’s rent-a-room limit for the tax year. The “limit” is the maximum amount of rent-a-room income that is exempt from tax. This Order increases the limit from £4250 to £7500.

A Tax Information and Impact Note covering this instrument was published on 8th July 2015 alongside Summer Budget 2015 and is available on the gov.uk website at https://www.gov.uk/government/publications/rent-a-room-relief-increase. It remains an accurate summary of the impacts that apply to this instrument.