Does rental income effect ESA.

teamgb

deletedelete

*~Zephyr~*

Yes. You must declare the income and your ESA will probably stop.

You must also tell HMRC you are receiving money from property and they will require you to complete an annual Self Assessment tax return and pay tax on the rental income, so you need to remember to keep money aside to pay your tax bill each year.

Also, you must research your legal responsibilities as a Landlord. You are effectively going into business and should treat it as such.

Someone will post G_M's excellent guide to Landlord duties/responsibilities shortly. Read it, it will keep you on the right side of the law.

pmlindyloo

*~Zephyr~* wrote: »

Yes. You must declare the income and your ESA will probably stop.

You must also tell HMRC you are receiving money from property and they will require you to complete an annual Self Assessment tax return and pay tax on the rental income, so you need to remember to keep money aside to pay your tax bill each year.

Also, you must research your legal responsibilities as a Landlord. You are effectively going into business and should treat it as such.

Someone will post G_M's excellent guide to Landlord duties/responsibilities shortly. Read it, it will keep you on the right side of the law.

Contribution based ESA is not means tested. The only income that affects it are pensions.

*~Zephyr~*

pmlindyloo wrote: »

Contribution based ESA is not means tested. The only income that affects it are pensions.

Thanks for the correction pmlindyloo.

The rest of my post stands true though

theartfullodger

Yes, inform ESA - but as you have a rented property any equity in it will be classed as "savings" and, if over £16k, you would/should never have been entitled to ESA, See
https://www.gov.uk/employment-support-allowance/eligibility

As you say it will not have a mortgage presumable way over £16k equity & if you are planning on buying it you must have, I assume, significantly over £16k savings (or a gift coming..) now.

If I've misunderstood, apologies!

antrobus

theartfullodger wrote: »

Yes, inform ESA - but as you have a rented property any equity in it will be classed as "savings" and, if over £16k, you would never have been entitled to ESA, See
https://www.gov.uk/employment-support-allowance/eligibility

"there is no income and savings test for contributory ESA"

http://www.entitledto.co.uk/help/employment-and-support-allowance-contribution-based

theartfullodger

Apologies, Antrobus is correct, I'm wrong, sorry, thanks for the correction.

teamgb

Thank you for all your replies. Thanks to pmlindyloo and antrobus for the answers I was hoping for. Any tax due will be paid.

LilyLizzie

While it is very true that ESA that is NI related allows you to have equity and income from that such as interest, you do need to advise them if you are renting a property out. This is because this is effectively running a business and therefore they are likely to say that this means you are able to work and therefore not eligible. Eventually they will cotton on as they do look at tax records and if you are declaring the income for tax purposes they will notice that so the quicker you let them know the better - otherwise it could look like fraud.

Alice_Holt

Subsequent posters may wish to check posting dates (and note that the OP has been deleted)!!!