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TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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I ear just over 42K. Wife earns nothing. Have this tax year

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I ear just over 42K. Wife earns nothing. Have this tax year rental income of ca. 10k GBP - property in my name only. Can I assign this to wife for tax purposes ? If so, how ?
In the case of spouses/civil partners who own property jointly, HMRC will normally treat the rental income from that property as if it belonged to the couple equally and tax each on half the income accordingly.
In the case of a husband and wife, it is not uncommon for the legal title to held either in the sole name of the husband , or in joint names, but rental income to then be declared as belonging to the wife, so as to make use of her personal allowance and marginal tax rates.
HMRC have previously only asked for evidence of beneficial ownership in the case of bank and building society interest, this requirement will also apply in respect of all types of property.
Taxation of income is based on beneficial ownership, not legal ownership.
For income tax purposes, you need to know who is the beneficial owner of the income, that is, who is ‘entitled to’ the income.
You would need to submit form 17 to HMRC with evidence of your beneficial interests before you will be taxed otherwise than equally. Evidence is provided by way of a formal deed, called a Declaration of Trust, signed by both of you, setting out your respective beneficial interests in the property.
Customer: replied 3 years ago.

Ok, seems straightforward enough.

Obviously this means my wife will have to complete a tax return, do I still have to do so ?

The Declaration of Trust deed - something that can be obtained off the shelf, form HMRC or needs to be drawn up by a solicitor ?


You would most likely want to use your solicitor for that.
If you have relatively straightforward tax affairs and already pay tax through PAYE (Pay As You Earn) you probably won't need to complete a tax return. Your wife would claim the rental if all beneficial ownership is transferred to her.
CustomerLast Viewed on 20/08/2014 at 17:13
I thank you Jon in advance for a positive rating. Rating lets Just Answer know you were assisted and credits me for the time.
I really enjoyed working with you Jon – please feel free to request me again when you come back to ask another question.
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