Income Splitting for the Yr to 5th. Apr '11 ?

Income Splitting for the Yr to 5th. Apr '11 ?

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I have heard that as from June '11 HMRC are allowing a Form 17 election to be submitted to allow couples to have interest / dividends owned jointly and previously split 50 / 50 to be split differently if that was to their benefit.

Does anyone know whether this applies to the yr to 5th April '11 of just from June '11  

Thanks in anticipation.

Jim

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By Paul Soper
07th Dec 2011 23:58

NO(ish)

You can only use Form 17 to declare an interest which is NOT 50:50 if it is actually NOT 50:50.  From June this year a redesigned form 17 was introduced which now requires evidence of the actual entitlement to be declared which previously was not required.

Note that income from close company dividends are excluded from this treatment and can only be split in the actual under-lying ratio of ownership.

If submitted Form 17 applies from the date that the taxpayers make the declaration (to themselves by signing it) provided that it is sent to HMRC within 60 days of that date.  This allows a minor degree of fine tuning within the year.  If interest is paid twice yearly on 30 June and 31 December and form 17 declares a 75:25 ratio of ownership from 1 July the income division will be 50:50 for the first payment, 75:25 for the second and so 67:33 for the whole of the year.

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