Spousal beneficial ownership and variation process

Hi, I'm seeking clarification on the beneficial ownership status of a rental property owned solely by my husband, and the process for varying beneficial ownership for tax purposes. (1) When my husband and I married, did his beneficial ownership of his existing property automatically change from 100% to 50/50, or did he still maintain 100% beneficial ownership? (2) If his beneficial ownership remains at 100% (unchanged by our marriage), what is the process for us to voluntarily vary the beneficial ownership to 50/50 for tax purposes, without altering the legal ownership recorded on the property deeds? Any references to relevant HMRC manuals or documentation would be greatly appreciated. (There is plenty of guidance for the scenario where property is already jointly owned 50/50, but less so for our scenario where one spouse is the sole name on the property deeds.) Thanks in advance.

Hi,
The beneficial ownership of the existing property would remain at 100% for your husband if you are not named listed on the title deed of the rental property, a Form 17 would not be appropriate for your situation, however, a valid declaration of trust would suffice to transfer beneficial interests in terms of rental income and expenses:
TSEM9520 gives details of how to make a declaration of trust
Thank youou

Thanks for the reply. We already signed a DoT to vary the beneficial ownership. We promptly forwarded this to HMRC, but they replied 7 months later saying they could not accept it because we did not also complete Form 17 within 60 days. We were abundantly clear about the property being solely owned. Unfortunately the letter from HMRC 100% contradicts your assertion that we merely need a DoT. I have also been told by a tax specialist that it's a common myth that a DoT alone is not sufficient for our scenario, and HMRC will reject it without Form 17. But advice on this subject is not consistent from what I've seen. I received different advice again when I called the HMRC phone line. They acknowledged that Form 17 does indeed appear to be inapplicable to our scenario, but that we should partially complete the form anyway(!) and send it in. (This is not actually possible from what I can see. It's web-only, and it doesn't let you leave fields blank.) Please help! What do we do?

Hi,

We can only provide general advice on this forum.

We would sugest that you write to us and explain in the letter that you wish to have the property income split 50/50 due to the fact you are now married and that the Form 17 is not applicable as you have previously been advised this should be sufficient for your records to be noted and for both you and your wife to declare 50/50 of the income on any returns completed.

Thank you.