Daily Mail and HMRC Form 17

Daily Mail and HMRC Form 17

Didn't find your answer?

Yesterday's Money Mail says:

'Husbands and wives and civil partners can transfer savings and investments from higher-rate to lower rate taxpayer. This will also work on buy-to-let property. If you want to keep things in joint names look to alter how the income is split. . . . . Fill in HMRC Form 17 to change it (ie. 50-50 income split) so the lower payer earns more of the income.'

I thought Form 17 could only be used if the reality of the ownership was not 50-50, not as a tactic to reduce a couple's tax liability. Is the Mail correct?

Replies (4)

Please login or register to join the discussion.

avatar
By Chris Wise
07th Apr 2011 11:58

Form 17

I have the same understanding a you Andy, so I think the Mail is, as is oft the case, wrong.

Thanks (0)
avatar
By cathygrimmer
07th Apr 2011 12:27

Wrong!

Hard to believe, Andy, but the Daily Mail is wrong! A declaration of beneficial ownership must reflect the actual beneficial ownership to be taxed on anything other than 50:50.

Cathy

[email protected]

 

Thanks (0)
avatar
By TaxationPete
07th Apr 2011 12:34

Trust

A formal Declaration of Trust can de drawn up to apportion the Beneficial Interest in the property and then the opportionment id detailed in the Form 17 and sent to HMRC within 60 days. Remeber Beneficial ownership and Legal ownership are completely seperate. Any mortgage provider does not need to be ingorm as the legal ownship has not changed. The restriction should be reported to HMLR. I would not suggest this is a DIY job as it has to be robust if questioned by HMRC. Cost is around £225 plus vat. I would point out that the rental income must to paid to the beneficial owners in the correct apportionment and banks accounts should reflect that and of course the two SATR's will show the apportions rental income and costs. Remember that if you sell the property you may wish to alter the DT and apportionment so the lesser can mop up enough CG to use all their CG Allowance. Regards Peter

Thanks (0)
avatar
By taxhound
08th Apr 2011 09:39

CGT implications

If the income is not split 50:50, then nor will be the capital gain on disposal.  Even if a declaration on form 17 is possible, it should not be done lightly.  The capital gain could be far bigger than the rental income over the years and the tax reduced qyite significantly by splitting it equally between the couple.  The Daily Mail doesn't mention that....

Thanks (0)