The UK Spouse Visa financial requirement can be met from income received without working, such as property rental income, dividends or maintenance payments. This income category is known as Category C, and it counts the gross amount received in the 12 months before the date of application. Appendix FM-SE of the Immigration Rules sets the rules for Category C, and the income must add up to a gross annual £29,000, or the application may be refused. This post provides an overview of how Category C non-employment income is calculated and evidenced for a UK Spouse or Partner Visa.
Key overviews
- Category C covers income the sponsor or applicant receives without working, such as property rental, dividends, interest, maintenance payments and certain benefits.
- The figure counted is the gross amount received in the 12 months before the date of application.
- The asset behind the income must be owned at the date of application. It must also have produced income for at least part of the previous 12 months.
- Category C is usually a top-up. It can be combined with employment income, cash savings and pension income to reach the £29,000 figure.
- Dividends from a sponsor’s own family-owned company are not Category C. They are assessed under Category F or Category G.
What is Category C of the spouse visa financial requirement?
Category C is the income category for income the sponsor or applicant receives without working. It sits in Appendix FM-SE of the Immigration Rules. That is the part of the rules setting out how income for a partner application is calculated and evidenced.
The figure counted is the gross amount of qualifying income received in the 12 months before the date of application. It can be received by the sponsor, by the applicant, or by both jointly.
The asset that produces the income must be held in the name of the sponsor, the applicant, or both. It must be owned at the date of application. It need not have been owned for the full 12 months, but it must have produced income for at least part of that period. An asset owned for the last three months, which produced income across those three months, gives income that can be counted.
Category C income may be combined with employment income under Category A or Category B, to cash savings, or to pension income. The £29,000 total is the spouse visa financial requirement, and Category C is one of six ways to meet it.
What counts as non-employment income for Category C?
Category C covers a fixed list of income sources set out in Appendix FM-SE. Income from a source not on the list cannot be counted.
The qualifying sources are:
- rental income from property;
- dividends or other income from investments, stocks and shares, bonds or trust funds;
- interest from savings;
- maintenance payments from a former partner, for the applicant, for a child of the applicant and that former partner, or for the sponsor;
- UK Maternity Allowance, Bereavement Allowance, Bereavement Payment and Widowed Parent’s Allowance;
- payments under the War Pensions Scheme, the Armed Forces Compensation Scheme and the Armed Forces Attributable Benefits Scheme, where they are not pension income;
- an academic maintenance grant or stipend, but not a student loan;
- ongoing insurance payments;
- ongoing payments from a structured legal settlement; and
- ongoing royalty payments.
Universal Credit, Child Benefit, tax credits and most other benefits do not count. Pension income is counted under Category E, not Category C.
What does not count as Category C income?
Several kinds of income that a couple may rely on in daily life do not count towards the financial requirement. A student loan does not count, though an academic grant or stipend can. Universal Credit, Child Benefit, Working Tax Credit and Child Tax Credit do not count. Contributory and income-based Jobseeker’s Allowance and Employment and Support Allowance do not count.
Loans and one-off gifts of money do not count as income. Equity in a property does not count, even where the property is mortgage-free. Income from renting a room in the couple’s own home to a lodger does not count. Rent from a property that will become the couple’s main home, where the couple already live in the UK, does not count.
How is Category C income calculated?
The Home Office considers the total gross amount of qualifying income received in the 12 months before the date of application. That total is the Category C figure.
The gross amount is used for most sources. For dividends, the net dividend amount is counted. Where the correct tax has been paid on cash income, and the bank statements show all of it, the gross amount may be counted. Where the bank statements show only part of the income, only the amount on the statements is counted.
One couple receives £9,000 in rent over the 12 months before the application, and £3,000 in dividends. The Category C figure is £12,000. Added to a sponsor’s salary of £20,000, the couple reach £32,000, which meets the requirement.
How is property rental income assessed under Category C?
Rental income counts where the property is owned by the sponsor or applicant and is not their main home. It must also not become their main home if the visa is granted. The property can be in the UK or overseas.
The figure counted is the gross rent received before any letting or management fee is deducted. Where the property is owned with someone else, only the owner’s share of the rent may be counted. The equity in a property cannot be used towards the financial requirement.
Income from renting a room to a lodger in the couple’s own home cannot be counted. Income from a property let out for all or part of the year, such as a holiday let, can be counted. Where the couple live in the UK, rent from a UK property that will become their home cannot be counted.
How are dividends and investment income assessed under Category C?
Dividends and investment income count where the investment is owned at the date of application. The amount considered is the net dividend amount received in the 12 months before the application.
Shares sold during that period can still count. Shares of an equivalent value must have been bought since in the same company, and be held at the date of application.
Dividends from a sponsor’s own UK limited company only count under Category C where the company is not family-owned. The test is paragraph 9(a) of Appendix FM-SE. Where the sponsor is a director or employee and the company is family-owned, the dividends are assessed under Category F or Category G instead.
What about maintenance payments, benefits and other sources?
Maintenance payments from a former partner count where there is a maintenance agreement. That can be a court order, a written voluntary agreement, or Child Support Agency paperwork. The payments must appear in the bank statements for the period relied on.
Maternity Allowance, Bereavement Allowance, Bereavement Payment and Widowed Parent’s Allowance count as Category C income. War Pensions Scheme, Armed Forces Compensation Scheme and Armed Forces Attributable Benefits Scheme payments also count, unless they are treated as a pension.
An academic maintenance grant or stipend counts in limited circumstances. The person must be receiving it, or be due to within three months of the application. It must be payable for at least 12 months, or one full academic year. A student loan does not count. A tax-free grant is counted at its gross equivalent.
Ongoing royalty payments count where a solicitor, accountant or business manager confirms the amount and frequency over the previous 12 months. The confirmation must also state that the payments will continue for the following 12 months.
Category C where an overseas sponsor is returning to the UK
An overseas sponsor returning to the UK can rely on Category C income, alongside the rules in the returning sponsors income guide. The asset must still be owned at the date of application. Rental income, dividends and the other listed sources are counted on the same 12-month basis.
Rent from a UK property that will become the couple’s home on return has a narrow rule of its own. It can be combined with the sponsor’s overseas employment income for the backward-looking part of the assessment. It cannot be combined with the income from the sponsor’s confirmed UK job offer. The property stops being a source of income once the couple move in.
Can Category C income be combined with other sources?
Category C income combines with employment income under Category A or Category B. It also combines with cash savings under Category D, and pension income under Category E. Each of these is measured over the 12 months before the date of application, so they add together directly.
Category C can also be combined with self-employment income under Category F or Category G. The non-employment income must then fall within the financial year or years the self-employment relies on. The asset must still be owned at the date of application.
Cash savings above £16,000 are counted separately, under Category D. The employment income guide covers how Category A and Category B are calculated. The pension income guide covers Category E.
What specified evidence is required for Category C?
Appendix FM-SE sets a fixed evidence list for each type of Category C income. All of the items for the source relied on must be provided.
Property rental income needs proof of ownership, a rental agreement and matching bank statements. Proof of ownership can be the title deeds, the Land Registry title register or a mortgage statement. The bank statements must show the rent paid in over the period relied on.
Dividends and investment income need a certificate of ownership and bank statements showing the income paid in. A portfolio report or a dividend voucher showing the net dividend is also required. Where the sponsor is a director or employee of a UK company, the application must also show the company is not a paragraph 9(a) type.
Interest from savings is evidenced with bank statements covering the period relied on. Maintenance payments need the maintenance agreement and matching bank statements. Benefits need Department for Work and Pensions or Veterans Agency documentation, with bank statements.
Any document covering a period that ends on the date of application must be dated no earlier than 28 days before the application is made.
Frequently asked questions
Does Category C income have to cover the whole £29,000?
No, category c may be combined with other income sources. It is added to employment income, cash savings or pension income, and only the combined total has to reach £29,000.
Is Category C income counted before or after tax?
Before tax for most sources. The exception is dividends, where the net dividend amount is counted.
Can rental income from the couple’s future home be used?
Not where the couple already live in the UK. A property that will become their main home cannot be a source of Category C income. There is a limited exception for a couple returning from abroad.
Do the couple need to have owned the asset for 12 months?
No. The asset must be owned at the date of application, and must have produced income for at least part of the previous 12 months. Only the income actually received in that period is counted.
Does Child Benefit or Universal Credit count under Category C?
No. Category C has a fixed list of qualifying sources. Child Benefit, Universal Credit and tax credits are not on it.
Can dividends from the sponsor’s own company count under Category C?
Only where the company is not owned by the sponsor’s family. Where the sponsor is a director or employee of a family-owned company, the dividends are assessed under Category F or Category G.
How Whytecroft Ford can help
Whytecroft Ford’s immigration team prepares partner visa applications that rely on various income categories. That includes landlords, shareholders, and applicants combining several income sources to reach the threshold.
To discuss a spouse visa financial requirement with our team, call 0208 757 5751 or use the contact form.
The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. UK Immigration Rules are subject to change. Please do contact the Whytecroft Ford team if you require further advice.
