Co-owner renting his share of the property, Implications?

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newhousey

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Recently bought a house with a friend, we're both FTBs, we have not moved in to it yet but my friend wants to rent out his bedroom in the property. Is there any tax implications if part of the house is rented out? Also what factors should I think of when setting up an agreement to allow the rental of his part of the property considering I will probably be living in the other half....
 
You will both have to pay stamp duty (clawback). The house will be seen as having been bought as an investment by revenue. When it comes to selling the house both of you will be liable to CGT on any gain even though it is your PPR afaik. Your friend will have to make Profit on Rental income returns each year and pay tax on any profit. There are generous allowances especially in the early years so tax way not be an issue. See [broken link removed]
 
If you're going to be living in the house, it could perhaps be argued that it falls under the rent a room scheme.
 
Thanks for the replies. Yes Seagull I was thinking if I bought my partner out maybe I could rent out his half myself under the rent a room scheme, anyone know whether I would qualify for this as we were both FTBs when we purchased the house.
 
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