Advice needed for mortgage free commercial landlords who's rental property is their pension/income.

tobadadd

Any help or advice out there for mortgage free landlords (commercial) who's rental property is their pension/income? Tenant, a restaurant owner, has declared that they are unable to pay rent for three months AND my insurance company is advising that it’s highly unlikely, despite having loss of rent coverage, that I would be covered for any loss of rent due to it being caused by Coronavirus. 

mwarby

Do you not count as being self employed ? If so do you fulfill the criteria of 50k or less profit last year and been running for more than a year ?

tobadadd

Thank you Mwarby, I looked into the above and believe I would need to be register as self-employed with HMRC. And unlike wages from a job or a business, rental income isn't considered to be earned income, instead its considered to be passive income by the IRS, and therefore not subject to self-employment tax. 

I could and hope to be wrong.  .  . 

Meanwhile my insurance company are advising that it’s highly unlikely, despite having loss of rent coverage, that I would be covered for loss of rent due to Coronavirus. 

LeeAHarris

If you're based in the UK and you rent a property you must be registered as self-employed with HMRC (unless you rent the property through a company). The IRS rule is irrelevant as they are in American, not the UK. Your income must be declared for tax purposes. If your tenant is genuinely unable to pay full rent, I would try to come to an arrangement with them to pay something, on the understanding that you will expect them to make up the shortfall, later. Meanwhile, register for self-assessment. You don't want HMRC to find out you get an income that you don't declare.

tobadadd

Thank you LeeAHarris, I will Investigate to see if i am registered or try to register as self employed. As it stands my rental income has been declared for all nine years and i have been taxed accordingly over that period. I could try to negotiate with the tenant but its an awkward situation given that they were forced to close.