Members' views are requested re the "practical" aspect of the valid tax-saving technique of apportioning Rents in respect of property held jointly by "man and wife" [or civil partners].
Typically, where one spouse is a taxpayer and the other spouse is not, apportioning the Rents (say) 99.9% to "wife" and 0.1% to "man" [assuming the "man" to be the taxpayer] would be advantageous. Section 836 Income Tax Act 2007 requires that where the couple own property jointly, it is required for tax purposes to be allocated equally, regardless of actual shares owned. Section 837 of that legislation enables the income proportions to be varied, but on condition that the capital and income shares of the property are the same as each other. Sections 836/837 apply to all types of property held by "man and wife", but my question specifically concentrates upon Rents from land and Buildings.
HMRC are of course required to be notified of "Section 837" submissions by means of Form 17. I gain the impression that some accountants [and taxpayers] consider that simply submitting Form 17 [which is required to be signed by both parties] to HMRC, showing the capital and income shares, is itself sufficient to establish that a "Declaration of Trust" is in force. That said, my feeling is that the majority view within the profession is that Form 17 must be supported by a separate "Declaration of Trust" document. My understanding is indeed that whereas some HMRC offices only require submission of Form 17, others require sight of a separate "Declaration of Trust" document to substantiate that Form 17.
As regards "Declaration of Trust" forms, there are "example" forms available on the internet and elsewhere, requiring very little material input, and thus minimal time costs. I surmise that the majority of accountants use, from whatever source, such standard "Declaration of Trust" documents. Seemingly at the top end of the scale are those accountants who however consider that a "Declaration of Trust" document should be prepared professionally by a solicitor, and indeed I have seen quotations for such work which would result in legal costs of over £1,000. Somewhat digressing, I am not entirely sure that accountants/taxpayers appreciate the necessity to first establish whether the Property is owned as "joint tenants" or alternatively "tenants in common" [since if course where the property is held as "joint tenants", then one can only apply for a variation of the allocation of Rents under section 837 after first changing the "joint tenants" position to "tenants in common"]. [I have recently noted legal advice that it is insufficient simply to prepare a "Declaration of Trust" and that one must also submit a copy thereof to the Land Registry]. There thus appear to be two ends of the spectrum of opinion, at the "lower" end of which is that only Form 17 itself is required, the "higher" end being that one should engage solicitors [at a cost potentially of over £1,000] to prepare a Declaration of Trust, and then submit it to the Land Registry. Somewhat in between [albeit nearer the "lower end"] is the accountant's, with minimal cost, using a standard [off-the-shelf type] "Declaration of Trust" form.
I would appreciate members' views of their procedures [ and the legal requirements] in relation to this matter. Basil.