Form17

[tynemouth]

My wife has very recently purchased a flat as a buy to let investment entirely from her own funds, but has had it registered in both our names as joint tenants. The motivation was that should one of us die the survivor would automatically become the sole owner

To reflect the fact that my wife provided the funds, a declaration of trust was drawn up naming my wife as the beneficial owner. She will declare the entire rent for the first time on her 2016/2017 self- assessment.

We have been advised that in the light of the declaration of trust, and the fact that she will receive the entire rent, there will be no requirement for a form 17.

Have we been correctly informed?

[SteLacca]

In the circumstances the advice sounds correct, though if you have any concerns why not just submit a form 17 anyway. It can't hurt.

[section 44]

We have been advised that in the light of the declaration of trust, and the fact that she will receive the entire rent, there will be no requirement for a form 17. Have we been correctly informed?

No.

If you do not file Form 17 then you and your wife would each be taxed as if half of the rent belonged to each of you.

[bd6759]

In the circumstances the advice sounds correct, though if you have any concerns why not just submit a form 17 anyway. It can't hurt.

The sole purpose of from 17 is to have the income taxed in acordance with beneficial ownership rather than 50/50. This is precisely the scenario that requires a form 17.

[devon]

Brexit means Brexit. Beneficial ownership means Beneficial ownership.

The wife receives the entire rent as beneficial owner and the spouse receives no rent

How can he be taxed on nothing?

[maths]

How can he be taxed on nothing?

Because he has no beneficial interest in the property and hence as no entitlement to any rents.

[bd6759]

Brexit means Brexit. Beneficial ownership means Beneficial ownership.

The wife receives the entire rent as beneficial owner and the spouse receives no rent

How can he be taxed on nothing?

He will be taxed on 50% because the law (s836 ITA 2007) says that the incoem form jointly held propery will be taxed 50/50.

836 (1)This section applies if income arises from property held in the names of individuals—
(a)who are married to, or are civil partners of, each other, and
(b)who live together.

(2)The individuals are treated for income tax purposes as beneficially entitled to the income in equal shares.

If they make an election under s837 (using the form 17) they will be taxed on their benefical interests, 100/0.

[section 44]

How can he be taxed on nothing?

surely you can't be taxed on nothing?