Earnings from AirBnB property

Hello. My wife and I jointly own our property. We have stated using one of our rooms as an AirBnB which has created a small income. My wife does not work and is solely responsible for the AirBnB advertising, correspondence, cleaning, maintenance etc. I would like my wife to take 100% of the earnings from the AirBnB as this would be her only income. Is this possible, even though we have joint ownership of the property?

Hi ,
 

Thank you for your question.  You may be able to use the Rent a Room Scheme.  Please refer to HS223 for more information : HS223 Rent a Room Scheme (2023)  .  Regarding ownership and taxation, please refer to our Trusts, Settlements and Estates Manual at : Trusts, Settlements and Estates Manual   . Thank you .

Thanks for your response. I understand the Rent a Room scheme. My question is regarding this statement: "the annual Rent-a-Room limit is £7,500. This reduces to £3,750 if someone else receives income from letting accommodation in the same property, such as a joint owner." My wife and I are joint owners of our home, but she receives full earnings from the Airbnb as her only income. Does this mean that she is entitled to the £7500 limit? Thanks in advance.

Hi,
Please see guidance available at TSEM9812 - Property held jointly by married couples or civil partners: Overview: two main rules which advises- the ‘50/50 rule’ (ITA/S836) whereby most income from jointly held property is treated as split equally between the two spouses or civil partners for income tax purposes; the 50/50 rule applies unless there is a valid declaration on form 17; sections TSEM9814-9840 contain the details.
Unless a Form 17 is in place to declare unequal shares in the property, the income must be split equally between spouses.
Therefore, Rent a Room limit would also be split by 50% to £3750.
Thank you.