Girlfriend moving in but room rental agreement in place for second bedroom

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    Girlfriend moving in but room rental agreement in place for second bedroom

    We own a second property, a two bedroom flat, which my son has lived in for the last three years. He pays rent and utilities although below the market rate. A few months ago we arranged for a friend to move into the flat under the room rental agreement. The friend is likely to stay for a few more months and his rent is below the current UK tax limit of £7550. The amount was calculated to take both his and my sons rent to a market rate. Now my son wants his girlfriend to move into the flat with him. She wishes to pay her share of the rental and utilities. What are the tax implications and should we ask her to sign AST agreement along with my son?

    #2
    Originally posted by Kentrental View Post
    We own a two bedroom flat, which my son has lived in for the last three years. He pays rent
    Have you been paying income tax on this rent for the past 3 years?

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      #3
      Kentrental, do you mean the Rent a Room allowance? If so then this doesn't apply to an AST. You have to pay income tax on all profits made after deductions.

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        #4
        thanks for the clarification. Much appreciated

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          #5
          If you have a mortgage on it check the conditions. Buy2Let mortgages usually preclude renting to relatives: Insurance worth checking also...
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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            #6
            I will ask the perennial question

            Do you have a mortgage on this property if yes have you obtained consent to Let to your son and notified the Insurance Co , if you don't again have you notified your insurance company of the letting arrangements and as the other poster have asked, have you declared your rental income to HMRC ?

            I am sure everything is above board but the questions have to be asked.

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              #7
              Originally posted by Mrs Mug View Post
              Have you been paying income tax on this rent for the past 3 years?
              Originally posted by Kentrental View Post
              thanks for the clarification. Much appreciated
              I'm taking that as a "no"...
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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                #8
                I do wish OP's would respond when such questions are raised rather ignoring them and leaving respondees to believe that the OP is another who has deliberately breached their mortgage terms and failed to declare their rental profits to HMRC.

                Sometimes silence isn't golden on the forum.

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