Any financial help if you are self employed but also have rental income

calcotti

Grumpy_chap said: Is the income that is not income but pretending to be capital subject to income tax?

Taxation rules and UC rules are completely separate.

calcotti

Jeremy535897 said:... but you can't convert rental property or shares into food on your table, and so in certain rare circumstances they might be regarded as having no value ascribed to them.

And this would in most cases only be for a temporary period. 

It is because certain assets cannot be readily converting into spending money that the rules include temporary disregards even in normal circumstances so, for example, if property is put up for sale the value will be disregarded for six months. If at the end of six months the property sale has not completed the disregard period can be extended. The general principle is that a claimant is expected to dispose of fixed assets to support themselves - but they are allowed time in which to do this.

Grumpy_chap

I apologise for my apparent intransigence on this.  From the arguments that are being put forward my wife and I could quite possibly qualify for UC right now because of the (hopefully short-term) income impact of coronavirus and applying a clever interpretation to discount capital.  However, most people, including myself, would assess our position as "fortunate" and suggest it is for us to manage what capital we do have to provide the all important "rainy day" support.  I don't consider that UC is there to prop up those willing to declare  questionable interpretations of their financial position, but to support those in genuine desperate need.

Jeremy535897

Grumpy_chap said:

I apologise for my apparent intransigence on this.  From the arguments that are being put forward my wife and I could quite possibly qualify for UC right now because of the (hopefully short-term) income impact of coronavirus and applying a clever interpretation to discount capital.  However, most people, including myself, would assess our position as "fortunate" and suggest it is for us to manage what capital we do have to provide the all important "rainy day" support.  I don't consider that UC is there to prop up those willing to declare  questionable interpretations of their financial position, but to support those in genuine desperate need.

I would not disagree, but the circumstances are extremely rare, and are just not capable of the manipulation you suggest, for the reasons explained. By definition, if rental property is being bought and sold (whether at £1 million or any other number), there is a market, and a nil value would not apply. In addition, there is no chance of such a wealthy person having less than £16,000 in bank accounts. Just forget about it.

calcotti

Grumpy_chap said:

I apologise for my apparent intransigence on this.  From the arguments that are being put forward my wife and I could quite possibly qualify for UC right now because of the (hopefully short-term) income impact of coronavirus and applying a clever interpretation to discount capital.  However, most people, including myself, would assess our position as "fortunate" and suggest it is for us to manage what capital we do have to provide the all important "rainy day" support.  I don't consider that UC is there to prop up those willing to declare  questionable interpretations of their financial position, but to support those in genuine desperate need.

The property market is open. No one is currently going to get a property treated as having nil value due to Covid alone. Even a property with sitting tenants has potential value to an investor and to get a disregard the property would have to put on the market. The situation earlier this year really was exceptional (and fairly brief). 
There are other situations in law which allow the value of property to be disregarded but these are not the norm. For example, people are not required to sell property lived in by a close relative who is disabled or pension age. Full details https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932331/admh2.pdf
The valuation of capital assets is covered within https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/890315/admh1.pdf

Grumpy_chap

Jeremy535897 said:

there is no chance of such a wealthy person having less than £16,000 in bank accounts.

I agree, but this will apply as much to the single-property BTL investor as the hypothetical £1m mortgage-free property portfolio.  

calcotti said:

The property market is open. No one is currently going to get a property treated as having nil value due to Covid alone. Even a property with sitting tenants has potential value to an investor and to get a disregard the property would have to put on the market. The situation earlier this year really was exceptional (and fairly brief). 

I also agree.  And this applies for the single-property BTL investor also, as the maximum LTV is usually 75%, so the 25% of even a modest flat is going to mean the £16k UC limit is exceeded.

Unfortunately, this idea that BTL investors can dis-regard equity in BTL property keeps coming up in this forum and is, IMO, not helpful as it gives posters false hope.  

Considering the OP's case:

fugitive333 said:

My income comes from self employment, though most of it is classed as rental income, not self employed income. 
It isn't enough to live off so I also work as self employed. This has totally dried up this year so there is a massive decreas in my income. I am not entitled to UC due to the equity in the property and not entitled to self employed grant due to the low % of my income classed as self employment. 

The OP is likely "established" with the BTL, as the rental income has exceeded the 50% sole-trader income over the 3-year assessment, so ineligible for SEISS.  The OP also acknowledges that equity in the BTL prevents eligibility for UC.  Introducing the idea of disallowing the BTL equity is not helpful to the OP.

The OP may be able to consider BBLS against their sole-trader trading income, or may be able to apply for nJSA assuming they have sufficient NI record.

calcotti

Grumpy_chap said: Introducing the idea of disallowing the BTL equity is not helpful to the OP.

As far as I can see the only advice to OP in this regard is that to get the equity disregarded they need to put the properties on the market.

mattyprice4004

You have savings for a rainy day; the rainy day has arrived.