HMRC Form17 and Tax

AJJB2024

Hello MoneySavingExpert.

I have a query about income from a rental property and tax efficiency. Can anybody help out with a some advice, or if it's possible, could confirm if we are on the right path and understanding please?

My partner and I are in a civil partnership and own a mortgage free property as joint tenants that we've been renting out for the past couple of months. With myself being at the top end of the basic tax rate and my partner not being in employment, our understanding is that we can offset my 49% share of rental income to my partner so it would reflect 99% to my partner and 1% to myself.

Upon extensive online investigating via Gov.uk and HMRC we understand that we have to submit a 'Declaration of Beneficial Interests in Joint Property and Income (Form17)' to HMRC along with either a Declaration of Trust, or a Deed of Assignment, or a Written Declaration. Are we therefore correct in understanding that we can submit the Form17 with a self written and signed declaration in the following format instead of the DofT or DofA.

Declaration of Beneficial Interests

We, (Name1) and (Name2), hereby declare that we hold the beneficial interests in the property located at (Property Address) (Description of Property) in the following proportions: 

Signed:

Name 1 99%

Date: (Date)

Name 2 1%

Date: (Date)

---

We are wondering if this third option of a self 'Written Declaration' would suffice for our supporting documentation with the Form17 instead of getting expensive documents drawn up such as a Declaration of Trust and Deed of Assignment in order to sever our joint equal share in the tenancy?

We thank you in advance for any advice or input you can offer and look forward to your reply.

Kind Regards AJJB2024

anselld

You first need to own the property as Tenants in Common, not joint tenants.  Then the deed of trust to specify shares, then Form 17.
You cannot do this retrospectively either, it must be done prior to receipt of the relevant income.

AJJB2024

Hi anselld thank you very much for your previous response.

Upon looking into what you have advised we are now aware that changing our tenancy from joint tenants to tenants in common (otherwise known as severance) is done with HM Land Registry 'Form SEV'. We would like to ask if you have any further insight into this leg of the process as the Form SEV doesn't afford anywhere to specify at what percentage the property will now be owned between us both. At a stab, we are thinking that the Form SEV will automatically convert us from being joint tenants 50/50 to tenants in common 50/50 share. Is this therefore the requirement of the deed of trust? We think that is what your last response was aiming at.

 

Kind regards

anselld

AJJB2024 said:

Hi anselld thank you very much for your previous response.

Upon looking into what you have advised we are now aware that changing our tenancy from joint tenants to tenants in common (otherwise known as severance) is done with HM Land Registry 'Form SEV'. We would like to ask if you have any further insight into this leg of the process as the Form SEV doesn't afford anywhere to specify at what percentage the property will now be owned between us both. At a stab, we are thinking that the Form SEV will automatically convert us from being joint tenants 50/50 to tenants in common 50/50 share. Is this therefore the requirement of the deed of trust? We think that is what your last response was aiming at.

 

Kind regards

Yes, I think what you have said if correct.

AJJB2024

Many thanks for your help anselld.

Bookworm105

if there is no evidence to the contrary then tenants in common are presumed to own equal shares
in your case therefore your (DIY) declaration is sufficient to evidence unequal shares, but the Land Registry has no interest whatsoever in recording (or tracking) respective shares of the registered owners it does care about.