Joint property and income

Joint property and income

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I act for a client that owns a property portfolio of both residential and commercial properties.

One of the residential properties is jointly owned with his wife, one with his son and two with his daughter. His son and daughter are both over 18 year of age.

As I understand things a husband and wife can elect to treat the income arising from a property as not being 50:50 - for example 60:40 - by completing HMRC Form 17. But is it then possible to treat the beneficial interest in the property itself as being in a different ratio to that of the agreed beneficial interest in any income arising?

I know that my client cannot use form 17 for the properties that are jointly owned with his son and daughter. Is there any way for the children to retain their 50% ownership in the capital value of the property itself (so as to preserve their annual CGT allowance upon disposal) whilst allocating the actual income derived from that property on a different basis?

Is there any legitimate way that a property can be deemed to be held 50:50 whilst all of the income derived from that property is treated as being taxable on just one individual?

Philip Park

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By User deleted
20th Aug 2008 19:45

ooocH
If a property is owned by a married/civil partnership then the income is default at 50/50 and other prodportion musr be reflected in the actual ownership of the property either by Tenants in Common for a robust Declaration of Trust. This apportionment is reflected in the Form 17 and apportions the revenue and capital although both CG A are retained. If you are not married then a retained statement apportionment of income resloves the issue and a letter to HRMC to reflect this. Always seems unfair that a married couple has to pay to apportion the ownership. Regards Peter

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By pawncob
20th Aug 2008 17:47

Doing the splits
Form 17 requires you to state the beneficial interest in the property
and the interest in the income arising, so it is possible to have different percentages for capital and income.
Any agreement to split income in a different ratio must be supported by documentation.

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