Jointly Owned Property

Income owned jointly will be taxed 50/50 on both of the owners.

Bank accounts and other jointly owned property

If a bank account is held by one person and at a subsequent date the account becomes a joint account then the income will be split 50/50 from the date the names on the account are amended.

Example: John held a building society account in his own name before he got married on 3 June 2010. From 8 June 2010 the account is held in joint names with his wife.  Interest arises on the following dates

30 June 2010 £500
31 December 2010 £600
Total £1,100

All the interest arose after 7 June 2010; so the total interest for 2010-11 is split 50/50 between the couple.

Houses/flats held jointly

The 50/50 rule does not apply to income arising from a UK property business which consists of the letting of furnished holiday accommodation.

  1. If a spouse or civil partner carries on the activity alone: that spouse or civil partner is taxable on the income.
  2. If a spouse or civil partner carries on the activity with others: the income is split for tax purposes in the way the parties have agreed to split the profits amongst themselves.

The basic 50/50 rule will apply to other property rental income.

It is possible for married couples and civil partners, in certain circumstances, to make a joint declaration of unequal beneficial interests.  The form is known as form 17.  This form needs to be submitted to HMRC in order to override the 50/50 rule.