Hello. For income tax purposes could anyone tell me if occupation rent paid by a former partner is treated the same as any other property income? Male in question has moved out of a jointly owned property. The ex partner (not wife, no children) remains in the property, pays the mortgage and pays him occupation rent for his 50%. He doesn't make a contribution to mortgage as he bought his half of their property outright. He's now living back in his first home on which he pays a mortgage. Thanks.
7th Jan 2021
Occupation rent and tax
Is occupation rent between ex partners treated like any other property income?
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Not sure what you mean by “occupation rent” as distinct from any other kind of rent? Surely the definition of rent is a payment for the exclusive right of occupation?
Do you mean is it ringfenced? If not, like kaff I'm not sure what you are asking.
Occupation rent:
‘The right to an occupation rent arises when one party is actually or constructively excluded from his or her property. The party excluded may seek occupation rent from the party remaining in the property.’
I suspected not but wondered if anyone was aware if it may be treated differently to straightforward property income. I understand maintenance payments aren’t taxable and can see an argument for occupation rent being considered as a type of compensation payment.
Oh you were thinking it might not be taxable at all?
I can sort of see where you're coming from, but the payments arise only because of the ownership of the property, so I don't believe they could be treated as anything other than income from that property.