Property in my name, can I split rental income with spouse

Hi Fayenic Dumas,
Your husband would need to inform HMRC first by submitting the declaration of trust that both of you need to sign and have witnessed.
Thank you. 

Dear HMRC Team Me and my friend purchased a property, friend put 50% cash and I put my 50% by getting mortgage on my sole name also property is only on my sole name. So I am paying mortgage from my 50% share of income my friend dosent pay towards the mortgage because he put full cash towards his share. We have created a declaration of trust in it we have mentioned that I will be responsible for mortgage payments. I like to know can I claim mortgage expenses only for my self or do mortgage expenses have to be split?? Thank you [details removed by admin]

Hi Sazid Mohmed
Thank you for your question.
As you have mentioned that you have already created a declaration of trust stating that you are responsible for the mortgage payments and your friend no longer makes contributions to the property, HMRC would expect that as you are the beneficial owner of the mortgage payments, that you would then claim the mortgage interest which is reflected within the Declaration of Trust.
Further guidance on ownership can be found in TSEM9170:
Ownership and income tax

Dear HMRC Team Thank you for your response. I would like to clarify the arrangement outlined in the declaration of trust. my friend is designated as the 50% beneficial owner of the rental income, while i am the 50% beneficial owner of the rental income as well as the 100% beneficial owner of the mortgage payments. according your response I would be able to claim the full amount of mortgage interest as an expense on my tax returns. have I understood correct? Thank you

Can you please advise of the processing time for a form 17 and DOT. Many thanks.

Hi Sazid Mohmed
Your question says 'property in my name, can I split rental income with my spouse' but you then ask about relief for your share of mortgage payments... please confirm what you need advice on.
If it is about claiming relief for mortgage payments I can confirm that as you are the only one with a mortgage for your 50% share of the property and make all of the mortgage payments you can claim relief for the mortgage interest against your share of rental income. 
Thankyou.

Hi Am33,

Unfortunately we are unable to provide a timescale. The form 17 declaration must be given to HMRC within 60 days of the date of the declaration.

Thank you. 

Hi HMRC, Property is on my sole name and would like to share the 50% of the income and expenses with my husband, is it possible if yes will it be via deed of trust? Can I prepare the Deed of trust myself and get it witnessed by anyone ?

Hi,

You will need to change the beneficial ownership of the property through a declaration of trust. You can see guidance here:

TSEM9150 - Ownership and income tax: legal background: ownership: legal and beneficial ownership - separation

A declaration of trust is a legally binding document that creates a trust. Most types of trusts giving an interest in property to somebody who is not the legal owner now need to be registered with HMRC via the Trust Registration Service. You can find guidance on the registration requirements and how to register here:

Register a trust as a trustee

There is also more information about what type of trusts need to be registered here:

TRSM23050 - Types of trust that need to be registered: contents: excluded express trusts: contents: property ownership

Thank you.

Hi, Can you please advise if it is possible to split the rental income 50/50 with my wife when the title and mortgage of the property is solely in my name? If this is possible, what is required to be able to split the rental income 50/50 with my wife? Thank you

Hi Lewis Cooper

Thank you for your question.
The starting point with rental income is 'whoever has beneficial ownership of the property has beneficial ownership of the income'.Please refer to the following guidance :
TSEM9160 - Ownership and income tax: legal background: ownership - income follows property
If you are the legal owner of the property and you wish your wife to receive a split of the rental income you will be required to prepare a Deed of Trust to arrange this.
You would be able to include any allowable mortgage interest payments within this Deed of Trust.

Thank You

Hi, Thank you for the response. How does the Deed of Trust have to be worded to split the rental income 50/50 with my wife? Thank you.

Hi,
 

Thank you for your question. When creating a Deed of Trust, it must contain the name and address of both parties, the address of the property involved in the Trust, must be signed by both parties and witnessed. Please find attached some guidance which should help with the wording of the Deed of Trust: Trusts, Settlements and Estates Manual . Thank  you

Hi, I own a property that bought before I met my wife which I now rent out. I would like to split the rent with my wife. a) Can this be done via a deed of trust b) what is the maximum amount I can transfer to my wife!

Hi,
Yes this can be done via a deed of trust & form 17. The maximum amount would be 100%.
The revised split would only take effect from the date of the signing of form 17 & deed of trust. It cannot be backdated.
Thank you.

I'm still confused whether I need to register a trustee on gov website or not, or is it just matter of creating declaration of trust form and keep it safe unless HMRC asks for proof? just to confirm, I am the sole owner of the property and if I transfer 90% of the income to my wife and keep the 10%, can I still claim 100% of the expenses such as service charge ground rent / insurance / mortgage interests?

Hi,
Firstly you will need to create a declaration of trust to be kept for your own purposes.
HMRC could request sight of this document at any time. Secondly in relation to expenses you should consider the first paragraph of TSEM8750 which will explain that expenses should be claimed for whoever has responsibility.
If you both have responsibilities for the bills and enjoy the same property then the expenses would be claimed on the 90/10 split.
TSEM8750 - Trust management expenses: allowable expenses: specific items: personal expenses of beneficiary
Thank you

Hi, Apologies for the repeat of this question, as I wanted to be sure and clarify my doubts. I'm the sole owner of the property, title is on my name only, and it is currently rented out. I would like to share all the rental benefits to my spouse as she is not working. I've been in touch with Tax consultant and Solicitor who have advised to do "DEED OF ASSIGNMENT OF BENEFICIAL INTEREST" Question is 1. Is DEED OF ASSIGNMENT OF BENEFICIAL INTEREST right one for me? 2. if yes, how do I declare the rent profit.. will the return be submitted by my name or my spouse name? I'm aware that "deed of trust" which is only applicable for those who jointly own the property and their both names are in the property title, then to submit Form 17 to declare their share on the rental income. Could you please clarity? Thank you.

Dear HMRC, I hope this message finds you well. I am seeking guidance on the tax implications of my residential property ownership and potential income-sharing scenarios. I own two Buy-to-Let (BTL) properties in Scotland, both in my name. As I am getting married soon, I am considering two options: 1. Uneven Ownership Scenario: I am considering adding a small percentage (1%) of my BTL properties to my partner's name while retaining 99% ownership. My objective is to transfer 50-65% of the rental income to my partner post-marriage using Form 17. I am curious to know if this uneven ownership distribution would be challenged by HMRC. Additionally, would I need to engage a solicitor to draft a Declaration of Trust for this purpose? Lastly, will this trigger any LBTT, CGT, or Additional Dwelling Supplement ADS? 2. LLP Setup: Alternatively, I am contemplating the creation of a LLP with my partner/wife. In this setup, the properties would remain in my name, with only the rental income being transferred to the LLP for distribution between us. Can I distribute the rental income unevenly, say 60-70% to my partner and 30-40% to me? Would a Declaration of Trust be necessary for such uneven income sharing? The HMRC manual suggests that no LBTT, CGT, or ADS would be payable upon setting up the LLP; could you please confirm this? Furthermore, if I set up a LLP, I plan to transfer the properties to a Limited Company (LTD) in three years. According to the manual, this transfer would be exempt from LBTT and ADS if the LLP exists for more than three years. Can you confirm the exemption from LBTT and ADS when transferring to a LTD after three years? Will there be any other taxes applicable to such a transfer? I appreciate your insights on which scenario is more likely to be accepted by HMRC and if these arrangements fall under settlements legislation. Your prompt response will be highly valued. Thank you for your time.

Hi Regu V,
A Deed of Assignment is used to transfer the beneficial interest in a property (most commonly between Husband and Wife )
This does not alter the legal ownership of the property  - the legal owner being who is named on the legal title at the Land Registry.
If a valid Deed of Assignment is in place , assigning the income to your wife, then in law , your wife is entitled to the income although you retain ownership of the property.
Your wife will report the income to HMRC in her name.
Thank you.