Deed of Assignment – Income and Expense Responsibilities

Hi, I’m looking for general guidance on implementing a Deed of Assignment for rental income. I understand that a deed of assignment can be used to transfer beneficial interest in a rental property, and that income should be declared in line with the assigned shares. I have one being drawn up professionally at the moment. I’d appreciate clarification on the following points: 1. Should rental income be paid directly into the assignee’s (spouse’s) personal account, or can it be received into a joint account? 2. For allowable expenses (e.g., repairs, management fees), does HMRC expect these to be paid directly by the assignee in line with their beneficial interest, or is there flexibility? 3. Where the legal owner remains solely responsible for the mortgage, how does this affect expense claims in relation to the rental income split? I understand that HMRC cannot provide personalised advice, but any general guidance or links to relevant HMRC documentation would be greatly appreciated. Thanks!

Hi,
To register a beneficial interest in a rental property, you must prepare a Deed of Trust, not a Deed of Assignment.

1. It is entirely up to the individuals how the accounts are set up, providing that each beneficial owner declares the profit in accordance with the split as noted in the Deed of Trust. A spouse must be a beneficial owner of the property and a deed drawn up to show she is a beneficial owner of the property. Husbands and wife’s must also complete a form 17 and a Deed of Trust relevant to the percentage split of the property income.
2. Repairs are to be split again in accordance with Deed of Trust 50-50, 60-40 and so on.
3. The financial residential costs, if paid by one individual, then they are entitled to set the financial relief costs against their percentage of the income.

Further guidance can be seen here:
TSEM9220 - Ownership and income tax: legal background: joint ownership - tenants in common
TSEM9230 - Ownership and income tax: legal background: joint ownership - presumption of joint tenancy
TSEM9800 - Property held jointly by married couples or civil partners: contents
PIM1000 - Introduction
PIM2005 - Deductions: general rules: overview
Thank you.