Declaration of Trust for jointly owned rental properties

June 13, 2017

Did you know?

If you own a rental property with your spouse or civil partner but you don’t split the income equally between you both, there is a dedicated tax form to let HMRC know.

Usually, the shares of a property between two or more people are written in a “Declaration of Trust”: this is a Deed that states how the property is divided.

What a lot of people don’t realise is that once the Declaration of Trust is complete, a form called a “Declaration of beneficial interests in joint property and income” form (or “Form 17”) can be sent to HMRC to complete the process.

Form 17 tells HMRC how the rental income should be split between the couple, in the same way as the Declaration of Trust confirms the capital shares.

Let’s take a married couple with a rental property who decide that they don’t want to own it 50:50 – they might instead decide that a 30:70 split puts them in a better tax position.  A “Declaration of Trust” would be drawn up to confirm the 30:70 capital split.  However, Form 17 can also be submitted to HMRC declaring the income split too.

Here at Edward Hands & Lewis, our Tax & Trust experts can advise you on the benefits of a “Declaration of Trust”.  The Deed can be drawn up for you and Form 17 can be completed and submitted to HMRC on your behalf as well.

Please feel free to contact Kate Godber or Jemal Deo in our dedicated Tax & Trusts team for more information.

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