The 2012 Olympics provides a great opportunity for local residents to make some tax-free cash, says Tax Tips & Advice. Under ‘Rent-a-room-relief’ (RARR), rental income up to £4,250 is tax-free,“and you don’t have to keep any special tax records, other than evidence that the rental was less than this amount”.
In spite of a recent confusing press release from the taxman, you are not restricted to only renting out part of your home. Nor do you have to be living in the property at the same time as your guests.
Section 784 of the Income (Trading & Other Income) Tax Act, which sets out the RARR rules, specifies only that the property must be your “only or main residence” at some time during the period you rent it out. RARR applies not only to rental income but also payment for providing meals, laundry, etc, to someone staying in your home.
Anyone can do this. If you live in an area that’s handy for foreign students, for example, you could benefit from RARR; householders in Wimbledon have been “taking advantage” of the tax break for years.