Inland Revenue - Questioning reduced rent?

[Keanu]

My latest tenant has moved out, paying a (market going) rent of £350 per month.

Relatives are moving in as new tenants. Can I set a considerably lower rent (£220) without the Inland Renenue questioning motives (I obviously have one i.e. they are relatives). I suppose I am asking do I need to justify a much reduced rent income on future returns?

[Tax Accountant]

My latest tenant has moved out, paying a (market going) rent of £350 per month.

Relatives are moving in as new tenants. Can I set a considerably lower rent (£220) without the Inland Renenue questioning motives (I obviously have one i.e. they are relatives). I suppose I am asking do I need to justify a much reduced rent income on future returns?

You can even let then use the property for free if you like. There is no obligation to let at market rent.

However, there may be restriction on any rental losses you may incur by not charging a market rent.

Ramnik

[Keanu]

Thanks Karongo,

Where could I find such limits on rental losses, and for how long could I carry them forward?

As it is family who are moving in I may even charge a minimal amount of rent - my property is secure and habited and I can afford the relatively small amount of mortgage still owed.

However, it may be that in a couple of years that I get a 'commercial' tenant wherby I would apply a proper market rent again - at which time accrued losses would be useful from a tax perspective.

[Tax Accountant]

Thanks Karongo,

Where could I find such limits on rental losses, and for how long could I carry them forward?

As it is family who are moving in I may even charge a minimal amount of rent - my property is secure and habited and I can afford the relatively small amount of mortgage still owed.

However, it may be that in a couple of years that I get a 'commercial' tenant wherby I would apply a proper market rent again - at which time accrued losses would be useful from a tax perspective.

Without research, I would guess that you cannot accrue any losses for use in the future. Losses are only allowed if they have been accrued on a letting on commercial basis.

Ramnik