No NIC Due On Rental Income
Class 2 NICs are payable by the self-employed at the rate of £2.75 per week, although there is a small earnings exemption for those earning up to £5,885. It is understood that HMRC believe Class 2 NICs also apply to buy-to-let landlords. This is not correct and was tested in a case before the Tax Commissioners back in 2002 (Rashid v Garcia), when it was determined that property income was not applicable for Class 2 NIC purposes. Please get in touch with us if you receive a demand from HMRC for Class 2 NICs or a questionnaire requesting details of your property rental activities.
If you would like some tax planning advice on rental income please call 01233 630000 and ask to speak to one our property tax experts.