HMRC’s Declaration of Beneficial Interests in Joint Property and Income – otherwise known as ‘Form 17’, can be used by spouses and civil partners to allow couples to split income for income tax purposes.
This is particularly useful if your spouse is in a higher income tax band and has the greater beneficial interest in a particular property.
The Form 17 declaration permits a move away from the default 50:50, to an income split that reflects a more beneficial state of affairs for the couple.
The declaration above must be made jointly by husband and wife within 60 days of the date on which it was made. It takes effect for income arising on or after the date of the declaration. The declaration will be invalid unless the parties’ beneficial interests in both income and capital are identical. The declaration applies until such time as the beneficial interests change. A declaration cannot be made where a husband and wife or civil partners own property as beneficial joint tenants.
In these circumstances the couple do not own the property in shares at all, but are entitled jointly to the whole of both the property and the income. This is distinct from the situation where the husband and wife or civil partners own property as beneficial tenants in common where they are each entitled to specific shares in the property and income arising.