tax saving tips for jointly owned properties

Top Tax Saving Tips for Jointly Owned Properties

The property that is owned by two or more parties is known as Joint Owned Property. The possible options for this purpose include couples, any family member, cohabitees, and civil partners. By following the right criteria and procedure by HMRC, the idea of joint property ownership tax implications is legally permitted. Due to tax exposure compliance and complexities, it could be a self-defeating process if you try to be tax efficient without seeking the right platform of accountant advisory.

Every case differs due to the kind of relationship among the property owners. There are important components to know as a joint property owner and this article will help you to know your options well. 

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Married Couples – Income Tax Calculation:

Both the spouses are considered to be equal owners of joint property by HMRC. In this regard, they are equally liable for joint property ownership tax implications. The trouble is detected when one of the partners is a high taxpayer, to which the 50:50 split becomes a reason to tax exposure. 

45% of the rental profits is the maximum calculated figure as the rate of tax. Let’s take the example of a couple enjoying equal benefits of rental shared property and they automatically come under the rules of 50:50 split which means they are liable for paying the tax rate as one-half share earned each. 

There can be two scenarios to be tax-efficient here. For instance, if one of the partners is a high taxpayer and the other is a basic taxpayer, if the income split is adjusted in a way that the major portions of income go to the basic taxpayer, the total tax altogether will be comparatively lesser. This can be further explained as below.


1- 50:50 Split:

To understand joint property ownership tax implications in a better way, let’s suppose a practical example of partners’ details of the tax.


Total Rental Earning: £20000

Husband’s 50% share: £10000

Wife’s 50% share: £10000


Tax Rate: 

High Payer: 45%

Basic Payer: 20%


Paid Tax:

Husband (High Payer): £4500

Wife (Basic Payer): £2000


Total Paid Tax: £6500


2- Inequitable Split:

Total Rental Earning: £20000

Husband’s 20% share: £4000

Wife’s 80% share: £16000


Tax Rate: 

High Payer: 45%

Basic Payer: 20%


Paid Tax:

Husband (High Payer): £1800

Wife (Basic Payer): £3200


Total Paid Tax: £5000


This is only possible if the partners agree to go under form 17 and change the ratio of split for their mutual benefits. However, some of the partners do not clearly understand which brings a lack of trust, and form 17 or split change seems risky to them.

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Form 17, Income Split Change:

To convince each of the partners about split change, it is important for them to have a vivid understanding of income split and for 17. This will result in the mind convincing to actually agree for an unequal split for the sake of mutual benefits.

The question that arises here is what is form 17 and how is it useful for joint property ownership tax implications? The partners of joint property ownership can benefit from a lesser tax ratio if they agree to terms and conditions legally. However, for a smooth process of form 17, it requires a specialist in tax management. Some of the components to ensure smooth processing by the experts is listed below.

joint property ownership tax

  • The first thing that needs to be completed is the date declaration. This means that the date on which the change in the split was considered must be in the records.
  • Property shares should not be shown equally for smooth processing.
  • Once the partners agree and sign for 17, it must be submitted within two months after that.
  • Partners need to undergo a legal agreement that clearly states their willingness for the unequal split.
  • The partners should not be represented as joint tenancy but tenancy in common.


Joint Tenancy vs Tenancy in Common:

Joint Tenancy: This means that each of the partners has equal rights to the property and if one of the partners demise, the property ownership automatically goes to the existing partner. When it comes to joint property ownership tax implications, both the partners are liable to pay 50% under split 50:50.

Tenancy In Common: In this kind of joint tenancy, each of the partners has a fixed share of the property. For example, you have a 30% share in the property while your spouse has a 70% share in the property. This is mostly used for married couples.



To Conclude, we can say that this needs to be clearly understood by each of the partners that this requires the experts and professional accountants to provide guidance and services for tax management and planning for  joint property ownership tax implications. Although, this can be challenging to convince the other partners to work for unequal split as they may see it as a risk or trick to earn more. A better demonstration can bring ease for parties to narrow down working and agree on one point. 

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