Spouse solely owns rental property is the rental income split 50:50

My spouse solely owns a rental property which I gifted to her, there is no mortgage. Hers is the sole name on the land registry for the property. She completes a self assessment and declares all the rental income, she is a low rate tax payer. Questions I have: - Is what we are doing correct or should we be splitting the rent 50:50 and declaring in our own self assessments separately? - Ideally we would like to keep the arrangement we have and she continues to declare 100% of the rental income. Do we need to fill and submit anything else to HMRC, Form 17 states it is not for married couples so a bit confused. - As she is the sole owner of the rental property, does that by default mean she has 100% beneficial interest? We are looking to continue as we are doing but a friend mentioned that even though my wife is the sole owner of the property the rental income by default becomes 50:50 so now we are unsure. Is there any other tax implications with my wife being the sole owner of this second property for example if we came to sell and not being able to combine capital gains allowance etc?

Hi,

Income from property held jointly by married couples is treated as beneficially owned by the individuals in equal shares. Consequently, they are taxable on the income 50/50. This rule applies even if the individuals own the property in unequal shares . By completing a declaration via form 17 , this can be disapplied.

In your circumstances, the property is not jointly owned. Your wife should continue to report the rental income via her Self Assessment return as she has 100% beneficial interest.

You can find guidance on  Capital Gains Tax here:

Report and pay your Capital Gains Tax

Thank you.