Last updated: 14 October 2026
How is rental income from a jointly owned property taxed?
Each owner pays income tax on their share of the profit at their own rates. For married couples and civil partners, the default rule is a 50:50 split, whatever the actual ownership. If you own the property in unequal shares as tenants in common, you can be taxed on your actual shares by sending HMRC a Form 17 declaration. Other joint owners, such as siblings or friends, are taxed on their agreed share of profits.
The rules at a glance
| Owners | Default split | Can you change it? |
| Married couple or civil partners | 50:50 | Yes, to actual ownership shares, with Form 17 |
| Unmarried joint owners | Their agreed share | Yes, by agreement, with evidence |
| Partnership | Partnership agreement | Yes |
Form 17
- Only for spouses or civil partners who own the property in unequal beneficial shares
- You must already own it unequally, for example as tenants in common with a declaration of trust
- Send the form to HMRC within 60 days of signing
- The split applies from the date of signing, not backdated
Example
Daniel and Priya are married and own a rental flat as tenants in common, 10% to Daniel and 90% to Priya. Daniel is a higher-rate taxpayer and Priya is a basic-rate taxpayer. The flat makes £15,000 profit a year. Without Form 17, each is taxed on £7,500. With Form 17, Daniel is taxed on £1,500 and Priya on £13,500. If £6,000 moves from 40% to 20% tax, the couple save £1,200 a year.
Expenses and mortgage interest
Each owner claims their share of expenses. For mortgage interest, each owner gets a 20% tax credit on their share. If one owner pays all the mortgage interest under the terms of the agreement, they may be able to claim more, but HMRC will look at the facts.
Reporting
Each owner reports their share on their own Self Assessment return. The UK property pages are used. If one owner has total qualifying income over £50,000, Making Tax Digital applies to them from April 2026, even if the other owner doesn’t need to.
Capital gains tax
When you sell, each owner pays CGT on their share of the gain at 18% or 24%, after their £3,000 annual exemption. Transfers between spouses are free of CGT, so some couples move shares before a sale to use both exemptions.
Changing ownership
Moving ownership shares between spouses can be done without CGT, but there may be stamp duty if there’s a mortgage, and you’ll need a solicitor. Ask your lender before changing the title.
Common mistakes
- Sending Form 17 when the property is held as joint tenants, which means equal shares
- Expecting Form 17 to backdate to the start of the tax year
- Each owner claiming all of the expenses
- Forgetting that an unmarried co-owner needs evidence of the agreed split
Frequently asked questions
Do we need a partnership?
No, joint ownership isn’t usually a partnership.
Can we split income 99:1?
Only if beneficial ownership is genuinely 99:1.
What if we divorce?
The Form 17 lapses when you separate.
Can unmarried partners split income unequally?
Yes, if that reflects their agreement.
Related: CGT on jointly owned property, joint bank account income and reporting service charges.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with jointly owned property tax. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
