Tax on Unearned Income
I was talking to a bloke in the pub who said that all rental income is taxed at 40% because it is "unearned income".
I said rental income is treated as any other income from self employment and would only be taxed at 40% if the taxpayer is a higher rate taxpayer.
I’m pretty sure I’m right; but as Tax is not my particular area of expertise and the chap I was talking to is adamant about this could someone advise please?
Also what, if any, is the difference for tax purposes between rentals and lettings?
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