Voluntary Class 2 NIC on Rental as only income on Landlord living abroad

Landlord Discussion New Laws & Regulation Changes
1

Can a landlord living abroad volunteer to pay Class 2 NIC on property in the UK that is their only income? Any advice is much appreciated.

2

I’ve just agreed with them to pay voluntary class 2 from April , not class 3 which is a fortune

3

I paid voluntary class 2 NICs for 21 years while living overseas. I’ve been back in the UK for the last five years though so things may have changed, but when I last looked, as long as you were employed before you left the UK and paying Class 1 and then left to work overseas in full-time employment, you were eligible to continue paying Class 2.

Check current eligibility rules online at gov.uk. There’s plenty of info.

Edited to add that is has absolutely nothing to do with your property in the UK. You could have none and still qualify.

4

Thank you for the information. Are you paying the Voluntary Class 2 just on property income alone? only our rental is actually only £9000 split between two is well below the tax threshold after allowances, so we don’t pay tax. I am just wondering if this has a bearing on the voluntary Class 2? I have tried to understand the Government website that gives examples and Tier 2 seems to include us??? Totally confused!!!

5

Sorry I don’t think this includes us then as we haven’t worked since being abroad… thank you for the information anyway

6

I think you might be confused by the fact that if you are non-resident and wanting to pay voluntary contributions, your income (UK or otherwise) is likely irrelevant.

If you’re in the UK and self-employed, it’s mandatory to pay some class of NI in lieu of the fact that you don’t have an employer paying Class 1 for you. And what rate you pay depends on your self-employed income. Overseas, it’s up to you whether you pay or not. There’s no legal requirement, and so income isn’t taken into account.

Here’s what gov.uk says:

If you live or work abroad (or have previously)

To pay Class 2 or Class 3 voluntary contributions you must have either:

  • previously lived in the UK for 3 years in a row
  • paid at least 3 years of contributions

To pay Class 2 voluntary contributions both of the following must also apply:

  • you worked in the UK immediately before leaving
  • you’re currently working abroad (or you worked while you were abroad)

So it’s likely you do qualify for Class 3 voluntary contributions while you’re overseas as you’ve said you’re not working. These are much more expensive than Class 2 which you don’t qualify for, but you will be able to keep your pension topped up if you want.