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HMRC Trusts & Estates has published revised guidance on the taxation of income from property. See the Trusts, Settlements and Estates Manual at TSEM9000 to 9978.
Most of the guidance is brand new and has not featured previously in an HMRC manual. It covers the taxation of rental income, bank and building society interest, and dividends. It provides legal background to the subject of ownership of property, and includes guidance on express and implied trusts.
The new information also features examples illustrating the principles of ownership and joint ownership in the context of taxation of income.
Part of the guidance in the section TSEM9800 to 9874, ‘Property held jointly by married couples or civil partners’, replaces guidance in the Independent Taxation Manual at IN115 to 144, which will be withdrawn later this year, as will the rest of the manual.
The updated guidance has led to an update for form 17, ‘Declaration of beneficial interests in joint property and income’.
Both the guidance and form state that evidence of beneficial interest must always be submitted with a form 17 declaration. Previously, HMRC had asked for evidence only in the case of bank and building society interest. The evidence requirement now applies to declarations in respect of all types of property.
