Meg Saksida looks at the tax position for landlords of property lettings where a market rent is not paid to occupy the property.
You love your family and your friends, and when one of them needs a roof over their head and you have an empty rental property, it is understandable if you allow them to stay either rent-free or at a reduced rent.
As that warm glow of having done something lovely for another person begins to settle, beware; as Oscar Wilde once said: “No good deed goes unpunished!” This is because even though the charitable gesture may be the right thing to do for your heart, due to the level of your tax payable potentially rising, it may not be the right thing to do for your finances.
What’s the downside?
The logic of the downside centres around why the expenses associated with the property are being incurred. Remember, for an
