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Is there any way that rents collected can NOT be classed as unearned income?
I have a few properties rented out as my sole source of income, run as a business, and spend a fair time on it- either at home or sometimes at the properties.
If 'unearned income' is classed as income for services (or in advance of what is being paid for) then surely this is not unearned income.
As a self employment business I put in my time to keep it managed and on the rails so can it be classed as earned income?
Of course there would be National Insurance payments then but also, as it is being classed as a business, no Capital Gains Tax to pay on a sale.
1 Answer
- fengirl2Lv 71 decade agoFavorite Answer
Income from property can only be classed as earned income if substantial services are provided, eg weekly cleaning, laundry, provision of meals, etc. the things you describe are what any normal landlord would do to ensure his property is kept in good order.
CGT would still be payable on the sale of the properties as they would be business assets if the lettings were classes as a business.
Source(s): ex Inspector of Taxes
