Rental income, tax, tenants in common or joint tenants

Hi, I have a property which is being remortgaged (BTL)… it has been in my name only, and has had a DoT for rental income to go to my husband (as lower tax payer). We are now getting a joint mortgage, and moving husband onto deeds. I have been told that we can’t be joint tenants and have DoT. Is this correct? We have been told need to be tenants in common. Can we be tenants in common with share 50:50, but do a form 117 so husband has 100% me 0% for rent income (for tax). Or does the form 117 have to be the same split as the tenants is come in? Thank you

Hi lucyb2024,
For more information please refer to our online Trusts, Settlements and Estates Manual at:
TSEM9205 - Ownership and income tax: legal background: joint ownership - general 
Thank you. 

Hi, I'm not an Admin but I think you may have misunderstood form 17. As a married couple the default basis is you are taxed as owning 50% each (irrespective of the share actually owned). But if you hold unequal shares, you can inform HMRC via form 17 that the actual shares held are not 50% each and you wish to be taxed on your actual share rather than the default share. If you own 50% each then the actual basis and the default basis return the same result, you are taxed on 50% each. To change it you would need to hold the beneficial ownership in unequal shares (one would need to own 70% of the beneficial interest to be entitled to 70% of the income). However if you read through TSEM that the Admin have linked, you will find a section on settlements which explains if a spouse transfers only the right to income (they do not also transfer the beneficial interest in the capital) then the transfer has no effect for tax purposes and the income remains taxable on the spouse who transferred it. It is only if you transfer the beneficial ownership of the property that the income is taxable on the recipient spouse. Or you may find this helpsheet easier to read than the TSEM https://www.gov.uk/government/publications/trusts-and-settlements-income-treated-as-the-settlors-hs270-self-assessment-helpsheet/hs270-trusts-and-settlements-income-treated-as-the-settlors-2024