Property tax: Form 17 - Get the details right

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In the first of a new series of articles on property tax Jennifer Adams looks at some of the nuances involved in completing a form 17 declaration of joint property and income.

Many married owners of jointly owned rented properties assume that so long as they declare the profit on one of their individual tax returns then that is their legal liability done.

But as one AccountingWEB member recently recounted in recently recounted, this is not necessarily correct, particularly if there is an uneven split of income and the taxpayers may need to complete a form 17. In response to this and numerous previous queries, this article covers the basic requirements of form 17 and considers the options it provides for efficient tax planning.

Types of ownership

There are two ways in which more than one person can own a property, either as:

1.  Joint tenants - whereby each is deemed to own an equal share in the property. So three joint tenants will be entitled to a third share of any income or capital gains arising from the one property. When one owner dies the property is automatically transferred to the other joint tenants in equal shares and none can sell their share without the others’ permission. The legal rights of the surviving parties to a joint tenancy override a will even if the will explicitly leaves the deceased’s share to someone else. Whatever the proportions in which the parties have actually contributed to the purchase price, and/or to the maintenance of the property or mortgage, the legal presumption is that any proceeds of sale will be divided equally. To place a house in joint names is to make a gift of any excess contribution to the other party.

2. Tenants in common – where the share of each owner is separate, may be unequal and can be disposed of in lifetime or on death as the respective owner wishes.

Two or more unmarried people may own property either as joint tenants or tenants in common, although it is more usual to be held as tenants in common. The default position of property ownership by spouses/civil partners is as joint tenants.

A joint tenancy ownership can be changed into a tenancy in common ownership at a later date, but a tenancy in common cannot be changed into a joint tenancy.

Register with AccountingWEB for free and log in to see the full article, which also covers:

  • Tax position for unmarried and married owners
  • The importance of a declaration of trust
  • Recent tax case - Koshal and Koshal v HMRC
  • Capital Gains position
  • Further information 

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About Jennifer Adams

Jennifer Adams

Jennifer Adams is Consulting Editor of AccountingWEB and is a professional business author specialising in corporate governance and taxation. She runs her own accounting and consultancy business with offices based in Surrey and Dorset.

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03rd May 2016 14:15

Property tax: Form 17 - Get the details right.
For future refrence

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31st Jul 2016 21:51

Why is form-17 not needed furnished holiday lets?

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By lhodge
to pablomole
17th May 2017 13:26

Was this question answered? Interested to know the reason also.

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31st Jul 2016 21:52

Why is form-17 not needed furnished holiday lets?

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19th Aug 2017 17:51

What happens if we were originally unmarried tenants in common and agreed a non- 50-50 split with a declaration of trust. As I understood it, we did not need a Form17 at that point. However, we have subsequently become married. Do we now need a Form 17?

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11th Jul 2018 12:41

Hi there
Is there any implication in regards to stamp duty by changing the beneficial ownership of the property by a Declaration of Trust?
Does it make any difference if the process if the property is mortgaged?
Thanks

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18th Feb 2019 11:17

Hi Jennifer. Just to clarify, If the Form 17 is not submitted within 60 days of the completion Declaration of Trust, does this mean a new Declaration of Trust required?

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