Property interests

ITA 2007 s 836 (“jointly held property”) deems that any income from such assets is to be divided equally between the parties subject to certain exemptions. The problem then arises when the parties have differing marginal tax rates. Perhaps one partner is not liable to tax while the other is or one is liable at the basic rate while the other has a higher rate liability.

In such circumstances the answer appears to be to allocate the beneficial interest in the property in unequal shares – or entirely to one to the exclusion of the other. ITA 2007 s 837 (“jointly held property: declarations of unequal beneficial interests”) then allows a declaration on form 17 to be made stating the income to which this relates and the property from which the income arises.

Now that I look more closely at s 837 I...