Taxation on Jointly Owned Property from 100% to 50/50

[Ptmt2017]

Hi all,

My wife and I jointly own a property which we have been letting for a number of years. Although it's jointly owned, I've always reported 100% of any income, losses or expenses from the property solely in my name on my tax return. For the first few years, we made a loss, but in the last couple of years we've made a profit, all of which I showed on my return as 100% down to me.

I'm now looking at the possibility of now splitting the rental income, and therefore tax, 50/50 between my wife and I. My wife has a part time job, but even with half the rental added as income she would still be well within her £11,000 personal allowance.

Would it be possible to now split the income 50/50? If so, would there be any implications, as I have previously claimed 100% of losses in my name?

Would it be possible to amend my tax returns from previous years? If so, would there be a penalty from HMRC?

Would my wife then have to file a self assessment tax return (she's never done one before), even though the income from it, combined with her part time job, won't take her above the £11k threshold?

I'd be very grateful for any advice.

Thanks.

[bd6759]

The income should always have been declared 50/50. That is the default position unless the property is owned in a diferent proportion AND you have elected by notice given to HMRC to be taxed in accordance with that proportion

You have until 31 January to amend your 2014-15 tax return. After that it cannot be amended.

You have up to 4 years to claim overpayment relief if you have overpaid tax because of an error in you tax return. You can claim relief back to 2012-13 as long as you do so before 5 April 2017. This is to be done in writing to HMRC. Serch gov.uk for overpayment relief.

Depending on the amount of income, your wife may need to complete a tax return. For as long as she has no tax libaility there is nothing for her to tell HMRC unless HMRC sends her a notice to complete a tax return.

[Ptmt2017]

Thanks very much for taking the time to reply. You've been very helpful. Would an amended return be subject to any penalties?

[bd6759]

Penalties are based on unpaid tax. You have overpaid tax and your wife isn't liable to tax, so in both cases there cannot be any penalty.

[Ptmt2017]

Thanks very much. You've been very helpful.