Airbnb sublet rental treatment by HMRC

by Readers Question

14:28 PM, 18th July 2019
About a month ago

Airbnb sublet rental treatment by HMRC

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Airbnb sublet rental treatment by HMRC

We just moved out of our flat in London owned by my partner. I suggested I could Airbnb it for him through my Ltd company as his agent as he does not want to rent it out permanently to strangers.

As we are not married, how would HMRC view this arrangement of me doing all the work, paying him rent for the 90 days allowed for the London short term renting rules and wrapping the project in an Ltd company?

Many thanks

Rine



Comments

Neil Patterson

15:41 PM, 18th July 2019
About a month ago

This kind of fine detail tax return assessment work is always best done by a qualified and insured accountant and never without all the fact and your circumstances.

As I am not the above I would not profess to offer specific advice, but others may have some tips for you.

Mark Alexander

16:14 PM, 18th July 2019
About a month ago

You cannot transfer the income stream to a Limited Company without also transferring the asset. [finance Act 2009 schedule 25].

However, you could establish a Limited Company and charge a “reasonable” management fee, comparable to that of other agencies.

The balance of income will be taxed as income from Furnished Holiday Lets.

If the property is a flat, make sure that your lease allows for it to be let on this basis. Also check your insurance and mortgage conditions.

Rine

18:10 PM, 18th July 2019
About a month ago

Reply to the comment left by Mark Alexander at 18/07/2019 - 16:14
To clarify; if I go ahead with the management fee option, any profits must go to the property owner as his and only his tax liability? I would not be allowed to let from him and then independently sublet as far as HMRC are concerned?

Mark Alexander

18:14 PM, 18th July 2019
About a month ago

Reply to the comment left by Dorine Flies at 18/07/2019 - 18:10
From a tax perspective you may get away with that since you’re not married to each other. It’s fraught with other problems though, eg lease terms, mortgage conditions, insurance etc. so I cannot recommend it.


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