Self employed landlord v second home

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    I have a claimant who has sold the previuos marital home and then used the money to purchase two other houses and is renting them out. She claims that this is a self employed business and therefore the houses would be talen into account as assets of the business rather than second homes. She is living in rented accomodation herself and requesting we pay the rent. Anyone have any clues? Im not sure we can use deprivation because technically she still holds the capital. Im lost in a sea of property here. Has anyone got any advice??? 😯 😯 😀


    Unfortunately, this is happening a lot and the claimant is correct.

    You cannot take the properties into account as long as they are being rented out through the self employment


    The claimant is correct, but only if you accept that this is a business and she is self-employed.
    I have, as an aside been rewriting our “Assessing self-employed persons” notes this morning, and have quoted a similar case.

    Self employed income does not include any rent received by the claimant on property other than their home, unless the renting of the property constitutes gainful self-employment.

    See R/FC2/92 for a fuller interpretation, if you can get hold of a copy – sorry I don’t have one! 😳
    You may have to ask a lot more questions to determine whether there is a bona fide business here, and perhaps the claimant will be able to satisfy you that it is, but I should not just take it as read before a bit of digging. You may wish to enquire what the net profit and loss of the business is and to see the accounts at least, to check that it is a viable going concern (not in itself an indicator of self-employment but maybe a steer in the right direction. 8) 😉

    Kevin D

    Another approach – ask the clmt for proof that she is self-employed. Any self-employed person is required by law to inform HMRC within 3 months of becoming self-employed. In turn, HMRC correspondence would confirm this. However, even this does not necessarily mean a person is self-employed for benefit purposes.

    The CD mentioned by Jon can be obtained courtesy of Rightsnet:



    I can see no way of being a self-employed landlord unless you own property on a truly magnificent scale!.

    As well as R(FC)2/92 see also CH4258/2004 where a claimant owned 3 properties and was still not a self employed landlord.

    If your claimant is providing other service e.g. grub then the situation may be somewhat different.


    Thank-you so much for your quick responses on this subject. You have all helped a lot and I am off to look at the cases you recommend and move forward with the decision focusing on the proof of being self employed for the purpose of benefit. Thanks guys! 😀

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