Does rent count as income?

clearingout

Hello all,
Just discovered that my ex is trying to rent out his house - he is moving away from the area so it's not really a surprise.

On CSA2. The house has no mortgage and is being offered for rent unfurnished. After paying rental agent's fees, repairs and tax (cough, cough!), does the rest of any 'profit' from renting out count as income for CSA purposes or is he allowed to offset against any rental he might have to pay when moved?

What evidence will I need to provide to the CSA to prove this income (assuming it is classed as income) - I have a copy of the estate agent's details and it's on Rightmove. Is this enough? I assume he will be assessed against this personal tax return for this if classed as income? What happens until he provides a tax return (which, if past experience is anything to go by, he never will!).

thanks!

Blob

My understanding is, yes it is income and yes it is taken into account as such.

clearingout

Presumably, then, he has an obligation to declare it as income (which he won't)?

Out of interest, does anyone know if the CSA and the HMRC ever actually talk to each other about people to do their own tax returns and/or those who are self-employed? I am in a situation where I have told the CSA an awful lot about my ex's financial situation, backed up with as much evidence as I can (so, in this situation, can point to the estate agent's details, for example). Will the CSA go to the HMRC for a tax return and when they don't get it, have a discussion about this with someone at the HMRC or would that be too much to expect?

Kimitatsu

HI CO

Yes it does count as income.....unless he has remortgaged the property, then the mortgage would be taken out etc.

The CSA and HMRC do talk to each other, in fact HMRC has on permanent loan to the CSA a team of forensic accountants. So push them to look into his details further, if I were you though I would wait until the house is rented out (thats a minimum 6 month tenencay then- you will know when it either disappears off the site or appears as let) and then you can prove that it is further income. Then apply for a variation......and you know the rest!

Blob

If the information is not given, then you have the option to go to Appeal, be advised this is not a fast process, but when you get to the hearing if you put the case that he is not declaring the income, the Judge will issue an Order, and he will have a given time to provide it. If it is not then the Judge will issue a direction to the CSA to take a figure into account or to make a interim assessment that will remove any protection that he is afforded by the system. This will effectively mean that he will have no protected income at all.

clearingout

thanks guys. It's probably not worth fighting over with him, to be honest. Or at least, I wouldn't be bothering if he bothered to pay now and again - as it is, I feel forced into chasing him for every last penny to make a point.

Would he be allowed to give the house over to a friend, family member or even a new wife? Would that be seen as a deliberate deprivation of income on his part or is he allowed to make such generous gifts?

Fission

Blob wrote: »

My understanding is, yes it is income and yes it is taken into account as such.

Not correct, I'm afraid.

Only earnings and benefits count as income on cs2. Rent can be counted, but only via a variation, which would have to be applied for.

mikey72

Fission wrote: »

Not correct, I'm afraid.

Only earnings and benefits count as income on cs2. Rent can be counted, but only via a variation, which would have to be applied for.

Rent from letting an unfurnished house counts as income on my tax return.
Can't comment on a cs2 though.

bdt1

If he were trying to avoid it being counted as income for HMRC purposes, he would have been better off declaring it as furnished or part furnished then his tax allowance to offset furniture and furnishings would be greater, thus less profitable income from rent.

Beware if you push for a variation this is all he would have to do to declare little or no income as an allowance from HMRC is given each year for update of furnishings in a furnished let property

Fission

mikey72 wrote: »

Rent from letting an unfurnished house counts as income on my tax return.
Can't comment on a cs2 though.

It doesnt matter about income for tax purposes. Rental income isn't income for new rules child support, except for professional landlords. The only way for it to be treated as income is via a variation.

Fission

bdt1 wrote: »

Beware if you push for a variation this is all he would have to do to declare little or no income as an allowance from HMRC is given each year for update of furnishings in a furnished let property

It doesn't matter what HMRC allow. Child support rules are different. They don't have the allowance you described.