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There are special rules for allocating the income arising from property held jointly by spouses or civil partners and this may cause confusion
We act for several buy to let investors who are married and require a tax efficient way for allocating the income between themselves for example 90:10. We have read about the following alternatives.
If the property is purchased as tenants in common (eg 90:10) with the larger share owned by the lower-rate taxpayer then both the income and capital follow this proportion. A form 17 must then be submitted to HMRC within 60 days otherwise the income is split 50:50; however the capital remains at 90:10.
If the property is owned as a joint tenancy then a declaration of trust must be made allocating the income profit 90:10 (and presumably the capital profit). Again a form 17 must be submitted within 60 days.
There seems to be much confusion as to the use of form 17 and also the ownership of the property...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
