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Undeclared rental income

Undeclared rental income, HMRC contacted husband, but not wife.

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Husband & wife have been letting out a house for 5 years, but not declaring the income. Husband has received a letter from HMRC asking about the rental income, but wife hasn't. As husband is higher rate taxpayer, they wanted the wife to receive most of the rental income. I don't think they can do this as the property is owned by both of them, and no form 17 has been been submitted. Am I correct?

Also, as wife hasn't been contacted by HMRC, is it worth making a voluntary disclosure? Or is that a waste of time as she's only making the disclosure because husband has been contacted by HMRC and therefore the disclosure could be viewed as prompted?

Thanks in advance.

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25th Jun 2019 15:19

I wouldn't have thought it counts as prompting as H & W are treated separately for tax purposes

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25th Jun 2019 16:26

How can it be a "waste of time" to disclose the undisclosed income?! I'd get it disclosed ASAP and worry about the detail of whether it was prompted or not later!

If you want to know all about "Form 17" search the site; it's raised as a question every few weeks.

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26th Jun 2019 09:07

I would agree with non prompted for the wife, we have had one or two of these come to us.

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26th Jun 2019 09:46

Use the LPC. For the wife propose penalties as unprompted & see how the LPC team react. Ignoring the H 'factor' they would probably just accept 10% for W

Depending on sums involved they seem to be pretty amenable, but I could foresee pushback as it being prompted by the enquiry to H, so be prepared.

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