Sharing rental income between spouses

[SimonA]

Hi there,

My wife and I jointly own a property that we have been letting out since August 2016. Based on the salary from her job, my wife is a basic rate tax payer earning £40k a year where as I am a higher rate tax payer. My question is, what are the rules governing how we apportion the rental income and allowable expenses from our property between us? Can we apply £2,999 rental income to my wife, thereby ensuring she is still a basic rate tax payer and then apply the remaining income and all allowable expenses to myself? Alternatively, if we share the rental income and allowable expenses 50:50, would she be pushed in the higher rate of tax and therefore, we would both pay the same tax anyway?

Any help greatly appreciated.

Many thanks.
SimonA

[maths]

As the property is jointly owned the default tax position is that you are each taxed on 50% of income/expenses.

If you wish to vary the % rental income on which you are each taxed then you need to jointly execute a declaration of trust specifying the % beneficial interest you are each to own which dictates the % rental income you are each entitled to (eg 90/10; 95/5; etc). Form 17 would then need to be lodged with HMTC.