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Accountancy Advice on Buy to Let Student Accommodation

Acquiring a house or flat for student members of the family at university or college can, if dealt with appropriately, present significant tax saving opportunities.

Your children are assured of a given standard of accommodation and many of the costs of running the property will be covered by letting surplus rooms to other students.

The income received is taxable but expenses incurred can be offset against this. An apportionment of all costs will have to be made to account for your children's own proportion of the costs.

Alternatively, using the provisions of the Rent a Room scheme, the first £4,250 of rent received from 'lodgers' in each year is free of tax. Any sum over this amount is taxable in full.

If purchased by the student, the property will qualify as their principal private residence, and if sold within three years of the student leaving university, the disposal will be free of Capital Gains Tax. Many lenders will provide a mortgage to a student if their parents act as guarantor.

Thinking of purchasing a property for your children at university, contact buytolet@moco.co.uk

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