Reply To: Self Employed Income or Capital in Property


There is caselaw that used to limit being a self employed landlord to 5 properties but that position has rather been abandoned now. Personally I would have little doubt that this claim should be accepted as self employment and the property capital ignored. The properties are now probably worth a lot of money now having been bought 14 years ago and many of the issues you raise are more about paying benefits to people who may be rather wealthy.

Arrears in rent I.E. tenants not paying or not being able to pay rent is at an all time high and evictions cost thousands. Not just court costs but legal fees. The amount of regulation about renting increases all the time with lots of further changes on the way.

No issues about gainful employment or anything like that. There are many (up to a million?) buy to let professionals in the U.K. as the social housing sector has declined as so little has been built. It also made a lot of sense when interest rates were at near zero.

So just take the profit less the notional tax as usual. You will need to reassess this claim every year as the amount of profit will change significantly and if they do sell a property then they need to tell you immediately.

I have sympathy with the issues you raise because it seems perverse to pay claimants with potentially millions of pounds of assets outside their own home but then the regs were drafted a long time ago when registered rents meant private property was cheap. Things have moved on dramatically but not the legislation. Covid for one has meant former wealthy business owners have large debts and the private rental market has become very political.