Income Tax form 17

Hello, Me and my spouse are thinking of rearranging the split of income for a jointly own property we are currently renting out (with letter of consent from the mortgage lender). We are looking into submitting an Income Tax form 17 to HMRC for this purpose, before this tax year deadline for the submission of self assessments. > https://www.gov.uk/government/publications/income-tax-declaration-of-beneficial-interests-in-joint-property-and-income-17 Do we need a deed of trust redacted by an accountant to accompany the declaration? Does the mortgage lender need to be informed of this change? Thank you

Hi,
 

Thank you for your question. As you have stated, a Form 17 would correct in declaring beneficial interests in the property if they are to be of an uneven share. I am unsure as to why the Deed of Trust would need redacting in this case, however, I would advise to complete a Declaration of Trust to accompany the Form 17 and have a copy available as HMRC hold the right to request this in the future. I would contact the mortgage lender for further advice as different providers may have separate rules and regulations, although as this involves beneficial interests in terms on rental income and expenses, I would speculate this may not be necessary. Thank you.

Hi, I am in the same position. I have got deed of assignment done by the legal firm for jointly owned investment property with my husband. I have few questions and would appreciate if you can answer. My husband is transferring 50% of his beneficial interest to me so I will be 100% beneficiary in this property which is legally owned by both of us and we will be tenants in. Common not joint tenants after sever. Please answer my questions: 1. Do I have to pay any stamp duty land tax or sdlt1 form as there is still total of 157000£ mortgage still left which is on both of us name? Will mortgage be considered as chargeable consideration in this case where we are married? I am not paying any money to my husband and 0£ chargeable consideration is written on deed of assignment. There is sdlt1 form needs to be done where more than 40000£ chargeable consideration is taken. I am not sure if it will be applicable in case of married couples when property still on mortgage. 2. Any Capital gains tax to be paid here if property is not sold at the moment and only beneficial interests are changing right now? 3. Any Inheritance tax or any other tax be paid here by me (wife) who will get 100% beneficiary rights? I look forward for your reply. Thanks D

@fred74 Hi I'm not HMRC Admin but just to be clear, the deed is only effective from the date it is signed. So if you only signed it today, it can only apply to income you become entitled to after today. A deed signed today would have no effect on how the income arising from the property in the 22/23 tax year or even the current tax year (at least up until the deed is made). I'm really not sure what the admin was thinking with what they said about the mortgage lender. For married couples, you must transfer the capital. You can't just transfer income else it is a settlement and remains taxable on the settlor (in other words, the transfer of income is ineffective for taxp purposes). If you hold the beneficial interest of a property, you're the real owner, the real person entitled to any capital or income from exploitation of the land.

Hi Deepika,

1. You will need to contact the stamp duty office as this forum is for personal tax only.  
2. Capital gains tax will only be applicable if the property is sold at a future date.   
3. No.

Thank you