Mark McLaughlin looks at some practical issues for spouses and civil partners of making a declaration of beneficial interests in joint property and income.
Assets such as an investment property are sometimes jointly held in the names of a married couple (or civil partners).
Generally, the couple is treated for income tax purposes as beneficially entitled to the property income in equal shares (the ‘50:50 rule’) (ITA 2007, s 836).
Example 1: The 50:50 rule
Carl and Denise are married and living together. Carl is a basic rate taxpayer; Denise pays tax at the higher rate. They jointly own an investment property (i.e., Carl 75%; Denise 25%). The property rental income is £20,000.
Carl and Denise each pay tax on income of £10,000.
