I have received a letter from HMRC stating that I may owe tax on rental income. The buy-to-let was originally set up on a private tenant but when they left the property, we moved our daughter in. She lives here rent-free but pays me £100 per month to cover insurance. We never got round to changing the buy-to-let mortgage but aimed to once the term was complete. What are the tax implications? 

Arthur Weller replies:  

In actuality, the £100 per month you receive from your daughter is considered to be rent. However, if the £100 per month is truly equal to the amount you have to pay for insurance, then you have not made any profit on this rental because insurance is an allowable expense. I would recommend that you write to HMRC explaining that the £100 per month rent you receive is matched by your allowable expenses.