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taxadvisor.uk, Chartered Certified Accountant
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If a couple are buying a rental property jointly, but the property

Resolved Question:

If a couple are buying a rental property jointly, but the property is in the name of just one of them, do they both have to pay income tax on the rental income?
What determines who pays income tax in this case?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to the site. Thank you for your question.

If a property is owned in joint names then rental income is deemed to be 50:50 ..shared equally.

If the property is registered in one name, then the income is chargeable to the person whose name is ***** ***** deed.

Here is guideline from HMRC -

If you live together with your spouse or civil partner, we normally treat income from property held in your joint names as if it belonged to you in equal shares and tax each of you on half of the income, regardless of actual ownership. Please complete this form if you want to be taxed on your actual shares (known as `actual basis'). You will also need to provide evidence that your beneficial interests in the property are unequal, for example a declaration or deed.

More information on jointly owned property can be found here (guidance from my accountancy body)

http://www.accaglobal.com/gb/en/technical-activities/technical-resources-search/2014/october/jointly-owned-property-form-17.html

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.


Customer: replied 1 year ago.

Isnt there an abiguity in this in that both parties are paying for the property, but only one person's name is ***** ***** deeds ?

The HMRC quote you provided talks about joint partners it does not mention title deeds.

Thanks

Expert:  taxadvisor.uk replied 1 year ago.
Thank your for your reply.

There is ambiguity in it. Normally if the property is jointly owned both names would appear on the title deed and HMRC would treat it as being owned 50:50 and would tax each party on that basis.

If the title deed is in one name but the beneficial interest in the property is joint, then you would have to complete a Form 17 to enable HMRC tax rental income on the stated basis.
You would also need to provide evidence that your beneficial interests in the property are unequal in the form of a declaration or deed.

More information on this subject can be found here

http://www.rrlcornwall.co.uk/wp-content/uploads/2013/03/Jointly-Owned-Property-and-Tax.pdf

I hope this is helpful.


taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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