We often receive questions about the tax due on property income where there are joint owners of a property. If this applies to you, hopefully this information will help you understand what you need to do.
If the joint owners of a property are husband and wife or civil partners, any profits and losses are treated as arising to them in equal shares. This is known as the 50/50 rule.
If both entitlement to the income and the property are in unequal shares, a form 17 election can be made to allow profits or losses to be split according to their actual share of ownership in the property. For further information, please see Declare beneficial interests in joint property and income
Where you jointly own a property with another family member, for example a brother, usually, rental profits are split between the owners in the same proportion that the properties are owned.
Joint owners can agree a different division of profits and losses and so occasionally the share of the profits or losses will be different from the share in the property. The share for tax purposes must be the same as the share actually agreed.
There are specific rules about property held jointly by married couples and civil partners. For further information on jointly owned property, please see Property income manual 1030
If you jointly own the property with someone else, usually, there won’t be a partnership. Your share from the jointly owned property will be included as part of your personal rental business profits. For further information on jointly owned property, please see Property income manual 1030.