Income from property & Carer Allowance

msaquib

Hi,

We just submitted application for carers allowance. It's in my other half's name. One of the questions asked if she has income from self employment - This includes income from property. She has answered Yes.

She has property let out from July. Rental income is £450pm but after expenses she gets less than £400pm. On Gov.uk website say's:-

you earn no more than £110 a week (after taxes, care costs while you’re at work and 50% of what you pay into your pension) - don’t count your pension as income

Even without expenses £450*12 comes to £5400. Requirement for CA no more than £110*52 comes to £5720. Any how income from property will not be counted because it will be less than £110pw.

At the end of the application it said:-

Documents required
You must now send:
• most recent finalised accounts you have for your business

What can we send to them? We can send copy of Tenancy agreement showing the rent. The property was let in my name and it was transferred over to my other half's name in July.

Thanks
MS

Brighty

Was in a similar boat a few months ago, filling in CA claim forms for my wife, who has rental income from a 25% share in 3 properties.

We obviously didn't have company accounts either. so we sent in my wifes last tax return as that details all the income and expenses for her rental income. We got a response back that that was not relevant, they returned the tax return and we got 2 forms to fill in instead, 1 for each of the last 2 tax years (or last year and current year, can't remember). Forms were based around running a company, not rental income, but we were advised to just fill in what we could and leave blank anything that didn't apply (such as company name). Had to write income and expenses of 100% of the properties, there was then a box to state she was a 25% shareholder.
Was not asked for and did not provide tenancy agreements.
Her share of rental income is £7k before expenses (over the £110 a week limit), £4.9k after, so under the £110 a week limit (it's her only income). Her claim went through ok once we returned the forms.

Not sure what you mean by "Any how income from property will not be counted because it will be less than £110pw. " Does she have other income? All income is counted, any earnings PLUS rental income after expenses must not take her over £110 a week. Under £110 a week, you get CA, over £110 a week, you don't get it

Brighty

WillowCat

How many properties does she have? If just the one, and it is not owned as part of a consortium, then it would be considered an investment, and the income would not be earnings.

If she owns multiple properties then it would be considered a business and therefore would be income.

The fine details are in here https://www.gov.uk/government/publications/decision-makers-guide-vol-3-subjects-common-to-all-benefits-staff-guide

Chapter 15, 15743-6

msaquib

Thanks for replying back.

It is just one property rented out and she has no other taxable income. I will just write to them explaining income and expenses. If they need any form etc to complete they can send it in.

WillowCat - Thanks for the link - its been really helpful. It is now clear that if it just one property rented out it will count as investment. It will only count as business if multiple properties are involved.

NYM

You still have to notify HMRC that you have rental income.

msaquib

NYM wrote: »

You still have to notify HMRC that you have rental income.

I am aware of it. The first online return for 2015/16 will not be due until Jan 2017 so more than enough time. Once return will be filed no tax will be payable anyway because her income will be less than Tax free allowance.

scousedave

If you have multiple properties and therefore classed as a business then your income would be profit after all expenses are offset just like any other business?

WillowCat

scousedave wrote: »

If you have multiple properties and therefore classed as a business then your income would be profit after all expenses are offset just like any other business?

Yes, but the OP has confirmed it is just one property and therefore is considered an investment, not a business.