Tenants in common change in benegficial ownership

My wife and son are legal owners of a rental property which they hold as tenants in common indicated by the Restriction* in the Title Deeds. So far, they paid income tax 50/50 but would want to change the beneficial ownership to 90% son, 10% wife. *RESTRICTION: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court 1. Does any documentation need to be submitted to HMRC (e.g. Deed of assignment or Declaration of Trust….) OR is it adequate to keep own records and pay income tax in new ratio 90/10? 2. Could this change to 90/10 beneficial ownership be made retrospectively to the beginning of this tax year? 3. Will there be capital gains tax arising as a result of this change? 3. Is any change in records required to be made/submitted to The Land Registry?

Hi,
Thank you for your question.
No documentation is requried to be sent to HMRC, however, I would suggest completing a Declaration of Trust for the specified split for rental income/expenses. In terms of the date the split begins, I would advise to keep a record of the date the two parties changed the split for any future queries such as Capital Gains etc.
As a result of the split, there would be no Capital Gains tax arising, and Land Registry would only need to be notified if a Deed of Trust is completed as legal title would be transferred in this instance.
Thank you.

Further to my original question: My wife and son would like a new beneficial ownership split for rental income/expenses to start from the beginning of the current tax year. Does the start date need to be mentioned in the Declaration of Trust which they will be completing now, during this current tax year Thank you Roman Mervart

Hi ,
 

There only Thank you for your question. The split of differing beneficial interests in a property is only applicable to spouses or civil partnerships. This would not be applicable in this case. The relevant information can be found : Declare beneficial interests in joint property and income   . Thank you .

Hello, It appears that there has been a misunderstanding. My wife and son are already tenants in common but they agreed to change the respective beneficial ownership from the beginning of this tax year into 10% wife and 90% son. Their rental income and expenses are being shared in those new ratios. For that reason they intend to state 6 April 2024 as the date of the new split in the Declaration of Trust, which will be signed shortly, early in December 2024. Please confirm that this is acceptable. Thank you

Hi,
Based on the information provided, this is the correct situation, we apologise for any confusion caused. The declaration of trust should be acceptable.
Thank you.