Property split between husband and wife

Rolo_Tomasi

In theory it is possible for the profit to be split in unequal portions however in practice I have never seen the Revenue agree to this. If the OP wanted to attempt this then they have to create a valid argument to the Revenue that a genuine partnership exists and that the income is split in accordance to the partnership agreement. There is not just a form to complete (and never has been as far as I am aware) and each case is judged on its merits.

For more information see the Revenue property manuals here

arfur

http://www.hmrc.gov.uk/manuals/Inmanual/html/In0050/03_0049_IN144.htm

http://www.hmrc.gov.uk/forms/form17.pdf

I have attached two links which relate to this subject from the Inland Revenue website. The latter one being the form that needs to be completed to change the % split.

Has anybody gone down this route and if so what was the outcome and was this all that needed to be completed?

Mikeyorks

arfur wrote: »

and was this all that needed to be completed?

..... have you not read replies? And have you not read the form you're pointing to? :-

You cannot make a declaration :

• unless the property and income are actually held by you in unequal shares. You cannot simply choose to have the income taxed on an unequal basis because you think it would be to your advantage.

arfur

Yes I have read the replies and the form. I want the property to be in unequal shares and I know people have changed this in the past, and the Inland Revenue do take notice of it (otherwise why would they have a form to arrange for this to happen!).

Has anybody had any experience of this and if so what was the process.

TM1976

As discussed earlier in the thread you need to to change the actual ownership of the property, then you can change the income split to match, as it says on the form.

You need to enter a formal contract with your husband to agree that he owns more than 50% and match that percentage.

However I agree with Rolo Tomasi when he says that the Revenue may not agree to this judgement because it isn't a bona fide change in ownership rather an agreement to get a more beneficial split of income for tax purposes.

I believe this basis may be easier to apply if you were not actually married as the contractual ownership might be more meaningful in that case.

biggingerdazza

arfur wrote: »

For the tax year 2008/2009 the property rental we have is split 50/50 as per Inland Revenue guidelines, however I am on 40% tax code and husband is on 22%.
QUOTE]

May I ask, if the property is listed with the mortgage and Land Registry as owned by either one spouse, can you still allocate 50% between both spouses? And where are these "guidelines"? I'm in the same situation. Thanks

ceeforcat

Arfur - quite simply you cannot have a different percentage share in a property from your percentage share in the income from the property. If you own 60% of the property you are entitled to receive 60& of the income but you will have to prove this inequal ratio.

The advice given by zygurat789 could not be more wrong.

Rolo_Tomasi

Arfur

Your 2 accountants have both told you that the income has to be split 50/50 as have most people on this forum. If you are so sure that you can change this split then why not just complete form 17 and send it to your local tax office - perhaps you will believe them when they turn down your application.

arfur

Rolo I did not say in my post that the accountants said it has to be split 50/50, what I did say was that they did not know much about it. They did not know much about anything in truth.

I know it can be done, and I know it has been done, the only thing I am struggling with is the detail behind it. Which is why I asked the question on the forum to see if anybody else knows the detail.

If you can not be helpful it may be an idea not to keep posting on the forum as your comments do not help in any way, and I am obviously not the only person who has an interest in this.

TM1976

The evidence is overwhealming that you can't actually do this, in fact the form itself says you can't.

The people who have said this genuinely know what they are talking about. You don't have to take this advice but if you aren't prepared to why bother asking?