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  • Writer's pictureClive Cass

Tax on property jointly held by spouses or civil partners

Updated: 6 days ago

This factsheet explores the tax implications of property being jointly owned by spouses or those in a civil partnership.


Jointly held property


The following rules apply for both Income Tax and Capital Gains Tax (CGT) purposes.


The ‘50/50’ Rule


When property is jointly owned by spouses or civil partners, the income from that property is treated for tax purposes as if the property were owned in equal shares. This applies even if the individuals actually own the property in unequal shares. This treatment can be disapplied by a declaration on Form 17 (see below).


The ‘50/50’ rule does not apply in the following circumstances:


·         The income is from furnished holiday lettings (FHLs);

·         The income is from a partnership, in which case the income is split according to the partnership agreement; or

·         The income is subject to a Form 17 declaration (see below).


The Form 17 Rule


Spouses and civil partners can request to be taxed on their actual entitlement to income from jointly held property. They do this by declaring their unequal interest in the property on Form 17.


A Form 17 declaration must be made jointly; if one spouse or civil partner does not wish to make a Form 17 declaration, both must accept the standard 50/50 split. Only spouses and civil partners who live together can make a Form 17 declaration.


The couple should submit evidence of the actual beneficial ownership when they submit Form 17. This could be a valid declaration of trust.


Once a declaration is made, it remains in force until the couple’s interests in the property or income change, or they stop living together as a married couple or as civil partners of each other.


How to complete Form 17


Form 17 must be used. It must be signed and dated by both spouses or both civil partners, but can be sent to the tax office of either spouse or civil partner.

The declaration sets out the property and income they want the declaration to cover and states the interest each spouse or civil partner holds in:

·         each item of property; and

·         the income produced by each item.


The form should reach HMRC within 60 days of it being signed by the second signatory, in which case all income arising on and after that date will be covered by the declaration.


Transfer of property


If the property is held in a single name, it may be possible to use a declaration of trust to confirm joint beneficial interest.


Income Tax and Capital Gains Tax will be based on the beneficial interest in the property, so if one spouse is a higher rate taxpayer and the other a lower rate taxpayer, changing the proportion of ownership could have a significant tax advantage.


Property owners may need to agree the split with their mortgage lender.

Property transfers between spouses are covered in a separate fact sheet.


Further information 


Information on property that is jointly held by spouses and civil partners can be found here:


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