This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


A bit of data which remembers the affiliate who forwarded a user to our site and recognises orders from those who become customers through that affiliate.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Should joint owners have a formal agreement of division of profits?
I have just purchased a property jointly with another individual (not my spouse or civil partner). Following renovation, we intend to commence holiday letting shortly through an agent. I am a basic rate taxpayer, whereas the other person is a higher rate taxpayer. I would like to declare all or most of the income myself in order to minimise the tax burden. HMRC’s Property Income manual indicates that joint owners can agree a different division of profits from their share in the property. I am wondering whether such an agreement needs to be formally documented and - if I am to declare all the income - whether the income needs to be credited to a bank account in my name only and whether the property agent's monthly statements should be addressed to me solely?

Arthur Weller replies: 
Your statements are correct. Such an agreement does need to be documented formally, but it is not something that requires a solicitor. Rental income is taxed on the person who is receiving or entitled to the income - see A written agreement can suffice for this. The income should go to the individual bank accounts in proportion to the entitlements. If you are to receive 100%, all the income should go to your account. If so, the property agent's monthly statements should be addressed to you solely.

This question was first printed in Business Tax Insider in February 2018.

Tax Insider Lite

FREE tax strategies delivered to your inbox every month.

  • By clicking on the button below you agree to the terms & conditions and the privacy notice of the website.
  • Subscribe for FREE