How does HMRC know who receives the rental income?

Hi, I am the sole owner of a property in the UK. I transfer 100% of the rental income to my husband. I understand that I do not need to fill the form 17 as this is not applicable. I understand that I need to write and sign a trust deed but that I do not need to register it nor to send it to HMRC. Therefore my question is the following: how does HMRC know that my husband is the one who needs to declare and pay taxes for this property? Thank you.

Hi, im not a HMRC Admin. But if you've only transferred the income to your husband then I'm afraid it is you who is still taxable on it as what you have gifted is a right to income while retaining an interest. https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem4205 For spouses you need to gift the equity/capital as well as the revenue.

Hi,
You do not need to complete the Form 17.  You need to write & sign a Trust Deed.  
However 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’s also more information about what type of trusts need to be registered at:
TRSM23050.  
Your husband will have to either write in to advise HMRC of his property income or register for self-assessment depending on the level of property income that he expects to receive.  
Guidance on self-assessment criteria can be found here:
Check if you need to send a Self Assessment tax return
Thank you.

Hi, Can I please double check on that point: "You do not need to complete the Form 17. You need to write & sign a Trust Deed. However 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. " => Do I really need to register a Trust Deed even if I only transfer rental income but not the ownership? The property will stay in my name. Thank you

HI,

 

Thank you for your question. Most types of Trust 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 at: Register a trust as a trustee - GOV.UK (www.gov.uk)  . There is also more information about the types of trust that need to be registered at: TRSM23050 - Types of trust that need to be registered: contents: excluded express trusts: contents: property ownership - HMRC internal manual - GOV.UK (www.gov.uk).  Thank you .

Good evening. Looking for some clarification on this also. I own a property, solely in my name in Dubai. We have moved back to the UK and I have completed a declaration of trust to transfer 100% of the income to my Wife. She has registered to file a self assessment and will complete soon. The 2 questions I have before we proceed to filing the SA are: 1) HMRC have stated on these forums that they do not need to see the trust document unless it is asked for and this does not need to be registered. Is this correct? 2) Do I need to complete a self assessment tax return even if my income is £0 for the same property? Many thanks

Hi,

Thank you for your question, it is your responsibility to notify HMRC of your rental income if you are informing our offices of a differing beneficial interest please see the following link:

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Thank you.