Form 17

[jshomesltd]

I have obtained Form 17 from HMRC as I wish to declare that my wife and I have an equal beneficial interest in the properties and the rental income notwithstanding these are not in joint but my sole name.

However the declaration on the form reads:

'We declare the details above correctly state our beneficial interests in the property described, and the income arising from it, and that the property is held in our joint names'.

As I say the properties are held in my sole name. Does this mean I have the wronfg form?

Any views please?

[pawncob]

Form 17 is used to declare that jointly owned assets (and income) are NOT held in equal proportions.

[Peter D]

You need to sever the sole ownership via a TR1 and either use tenants in common shares or joint ownweship and a Declaration of Trust. Regards Peter

[jshomesltd]

Thank you for the clarification. Until I take these steps does that mean I must declare the full rental income as mine solely as opposed to my wife and I both completing a tax return declaring 50% each?

[maths]

The properties need to be held in joint names for rents to be split.

Once the properties are so held, rents are automatically split 50/50; no Form 17 is necessary.

If the properties are held unequally and rents are to be split unequally Form 17 is necessary.

[jshomesltd]

Sorry if I'm appearing a little dense. I thought that even if properties were in the sole name of one spouse, the beneficial interest and therefore rental income could still be shared by executing a Declaration of Trust. Is my understanding wrong? So are you saying until I add my wife to the legal title (with mortgagor's consent) I would have to continue to declare the rental income in my sole name?

[Peter D]

Two contributors and the Form 17 tells you so. Regards Peter

[maths]

Apologies for my somewhat curt response which on re-reading is a little misleading.

Where a property is held in one name (you) and you execute a simple declaration of trust under which the beneficial interests are to be held, say, 50/50 with the wife any rental income from the property is split 50/50 and taxed accordingly.

If you execute a declaration of trust under which the beneficial ownership % are, say 80/20 with the wife but you remain as sole legal owner you will each be taxed 80/20.

Thus, no need to change the legal ownership from you to you and wife.

Your initial query related to Form 17. This form is used by married couples where the property is in joint (not just one) names and the beneficial ownership of the property is not 50/50 (eg 60/40) and the owners wish to be subject to income tax on rents, not 50/50 (as would normally apply), but in line with their respective ownership % ie 60/40 in my example. Thus, in the absence of filing Form 17 rents would be split 50/50.

[jshomesltd]

Thanks maths for your succint advice and clarification, i've got it now! much obliged.