A. With some exceptions, there is a general presumption that spouses and civil partners who jointly own property own it, and the income which flows from it, on a 50:50 basis. This is why couples who wish to share and be taxed on income otherwise than on a 50:50 basis have to effect a change to the beneficial ownership of the asset and then make a declaration to HMRC using Form 17.
This 50:50 rule can work to your client’s advantage. If she transfers the investment property into joint ownership with her husband so that she retains beneficial ownership of 99% of the property and her husband has 1% then, in the absence of a Form 17 declaration, they will be taxed on the income on a 50:50 basis but she is still in a position to pass on 99% of the value of the property to her children.
If you have a tax query, why not contact the Tax Advice Line on 0844 892 2470 to discuss it. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.
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