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Husband and wife property income

Declaration of Trust / Form 17 not needed if Tenants in Common ?

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A husband owns a rental property with no mortgage.  He pays tax at higher rate, but wife is standard rate.

He is transferring property into joint names with ownership being Tenants in Common, 90:10 ratio in wife's favour.

Am I correct that, in these circumstances, neither Declaration of Trust or form 17 are required ?


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By John R
09th Oct 2019 10:39

I am not a lawyer but the act of transferring the property into joint names is usually carried out by way of a declaration of trust so presumably this is already being done. A form 17 is required otherwise the income will continue to be taxable on a 50:50 basis. It will be valid in relation to income arising after the date of the form 17 declaration which must be submitted to HMRC within 60 days.

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By The Dullard
09th Oct 2019 10:53

If the husband continues to hold the property in his sole name, but gives the wife a beneficial interest using a declaration of trust, then form 17 is not required, as ITA 2007 s 836 only applies to property "held in joint names". See TSEM9810.

If the propery is put into joint names with a trust arrangement, which is how a tenancy in common is achieved, then form 17 will be needed.

Is there any debt on the property? Has SDLT (or its Welsh or Scottish equivalent) been considered?

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Jennifer Adams
By Jennifer Adams
09th Oct 2019 15:29

See here for the answer:
As John says -this should be done at the same time as the transfer.
The article link above is 3 years old but nothing has changed.
Under the heading - Declaration of trusts it says:
"The specified share of a property held as tenants in common is not shown on the title deeds of the property, so how much each individual owns and under what terms is recorded in a formal document known as a “declaration of trust”. The declaration of trust is then signed by all parties and recorded on the property register at the Land Registry. Evidence of the property being held jointly in unequal shares must be submitted to HMRC with the form 17. The strongest evidence is a declaration of trust which costs in the region of £300 to obtain from a solicitor."

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