Would you please clarify whether unmarried joint tenants of a property could change the profit allocation each year, based on their marginal tax rates, from just a formal agreement each year between them, without the need to notify HMRC of the agreement? Secondly, would submission of form 17 only be necessary for married couples or civil partners and only when they own properties as ‘tenants-in-common’? 

Arthur Weller replies:  

Unmarried joint tenants of a property can change the profit allocation each year, based on their marginal tax rates, from just a formal agreement each year between them, without the need to notify HMRC of the agreement. However, preferably, the agreement for a tax year should be made before the beginning of that tax year. See HMRC’s Partnership manual at PM137000. HMRC’s Form 17 is only applicable to married couples or civil partners. If the property is owned 50:50, whether jointly or as tenants in common, Form 17 is not applicable. HMRC’s Trusts, Settlements and Estates manual at TSEM9848 states that Form 17 is only applicable when the property is owned in a different proportion than 50:50. When owned in a different proportion than 50:50, it must be owned as tenants-in-common.