Only if the ownership genuinely supports it. Married couples and civil partners who jointly own a rental property are taxed 50:50 by default. To be taxed on an unequal split, such as 90:10, you must actually own the property in those shares and send HMRC a Form 17 declaration backed by evidence.
The default rule
For a married couple or civil partners living together, rental profit from a jointly owned property is split equally for tax. It makes no difference who paid the deposit, whose name is on the mortgage or who manages the lets.
Unmarried co-owners are different. They are taxed on their actual shares of the income.
Form 17
If a couple own the property in unequal shares, they can ask to be taxed on those shares by making a Form 17 declaration. Both sign it, and it must reflect how you actually own the property and its income. HMRC expects evidence, such as a deed or declaration of trust. It applies from the date of the declaration, provided it reaches HMRC within 60 days of signing.
Changing ownership between spouses is normally free of Capital Gains Tax. But there can be Stamp Duty Land Tax if a mortgage moves across, the lender may need to consent, and a solicitor should draft the paperwork.
Worked example
A husband earns £70,000 and pays 40% on the top slice of his income. His wife has no other income. They own a Brighton flat that makes £20,000 profit after expenses.
50:50 (default): £10,000 each. He pays 40% on £10,000, which is £4,000. Her £10,000 is covered by her £12,570 personal allowance, so £0. Total tax: £4,000.
All to the wife (if she genuinely owns it all): £20,000 minus £12,570 leaves £7,430 taxed at 20%, which is £1,486. Total tax: £1,486.
All to the husband: 40% on £20,000, which is £8,000.
The figures ignore mortgage interest, which individual landlords get relief for as a 20% credit rather than a deduction.
What to do
- Confirm who legally owns the property and in what shares.
- If you want to change the shares, get a solicitor to document it.
- Both sign Form 17 and send it to HMRC within 60 days.
- Report each person's share on their own return from that date.
Common mistakes
- Agreeing an informal split with no ownership change behind it.
- Trying to apply a new split to a tax year that has already ended.
- Ignoring the mortgage lender and Stamp Duty Land Tax.
- Assuming a spouse with no other income should own everything. The right split depends on both incomes and on Capital Gains Tax later.
Sources: GOV.UK: Form 17 declaration of beneficial interests · HMRC Property Income Manual PIM1035: jointly owned property
Frequently asked questions
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