Last updated: 14 October 2026
Can you use the Rent a Room scheme for a family member?
Yes. Rent a Room relief lets you receive up to £7,500 a year tax-free from letting furnished accommodation in your only or main home, and there’s no rule against the lodger being a relative, such as an adult child, sibling or parent. The arrangement must be a genuine letting of furnished accommodation in the home you live in. If a family member simply contributes to household bills without a formal letting, that isn’t income at all and needn’t be reported. The limit is halved to £3,750 each if the income is shared with someone else, such as a spouse.
How it works for family lodgers
| Situation | Tax treatment |
| Adult child pays £400 a month board, lives in your home | Covered by £7,500 relief; nothing to report |
| Parent pays £700 a month for a furnished room | £8,400 a year: over the limit, so report |
| Family member shares household bills only | Not rental income |
| Relative rents a separate self-contained flat in your home | Can qualify if part of your main residence and not let as a separate business |
| You live elsewhere and let to a relative | Not Rent a Room; normal property income |
Over the limit
If you receive more than £7,500, you can either:
- Pay tax on the amount above £7,500, without deducting expenses, or
- Opt out and pay tax on actual profit (rent minus expenses)
Choose whichever gives the lower taxable amount. You must register for Self Assessment if over the limit.
Example
Maggie’s son, 24, moves back home and pays £500 a month, £6,000 a year, towards rent and food. This is under £7,500, so it’s tax-free automatically. When her mother moves in too and pays £300 a month, total receipts are £9,600. Maggie can pay tax on £2,100 (the excess over £7,500), or on her actual profit if expenses are higher. Including food in the payments counts towards the gross receipts.
Does it affect CGT?
Letting a room to a lodger who lives as part of your family doesn’t normally restrict private residence relief on sale. Letting a larger part of the home, or a self-contained unit, could.
Council tax and benefits
An adult family member living with you may end the single person discount. If you get benefits, board payments may count differently, so check with the benefit office.
Common mistakes
- Thinking family lodgers can’t qualify
- Forgetting food and laundry charges are part of receipts
- Not halving the limit when sharing income
- Using the scheme for a property you don’t live in
Records to keep
Keep a simple record of payments received and what they cover. This helps if HMRC asks or if receipts later exceed the limit.
Frequently asked questions
Does a relative need a tenancy agreement?
Not required, but a note of terms helps.
Can my child pay me rent from student loans?
Yes, same rules.
Can I claim Rent a Room in a holiday let?
No.
Is it automatic?
Yes. If gross receipts are £7,500 or less, the relief applies automatically and you don’t need to report anything.
Related: the Rent a Room scheme, reducing your council tax bill and main residence relief.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with rent a room and lodger income. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
