Splitting Rental Income - Married Couple

Dear HMRC Team, My wife and I are about to complete the joint purchase (no mortgage) of a buy to let property. I pay 20% basic rate tax on my pension and my wife is a non-earner so we wish to allocate the majority of the earnings to her for tax purposes. We want to ensure everything that we do is prudent and above board, and so want to check our approach with you prior to acting. Through the solicitor acting on our behalf we are proposing the following. 1. Confirming that we will hold the property as 'tenants in common', and that this is stated on the Land Registry title deed for the property. 2. Stipulating that the beneficial ownership of the property will be split 95% by my wife and 5% owned by me, and I understand that we do this via a 'Declaration of Trust' document. 3. In order that rental earnings are split on the same basis as 'beneficial ownership' (i.e. 95/5%) we need to submit a HMRC From 17 to HMRC within 60 days of contract completion, along with the Declaration of Trust document. We will then need to submit individual tax returns for tax year 2024/25 (online prior to 31/01/26) in order that tax liabilities can be calculated and tax paid. Given the above approach HMRC will consider rental income on a 95 / 5% split with the higher proportion being my wife's income. Does this all sound correct. Thanks.

Hi,

If the split of beneficial interests in the property are anything other than 50:50 you and your wife will need to complete the form 17 and return to HMRC with supporting evidence such as a declaration of trust within 60 days of signing the document. 

Declare beneficial interests in joint property and income

Please see  TSEM9860, which states "only income that arises after the date of the form 17 declaration is covered".

TSEM9860 - Property held jointly by married couples or civil partners: Form 17 rule - when declaration takes effect: normal case

You will need to submit tax returns for 2024 to 2025 by 31 January 2026. You can do this online.

File your Self Assessment tax return online

Thank you.