Jointly Owned Property? How Married Couples Should Declare Rental Income

When you own a rental property with someone else, it might seem like the easiest option is to have the lower earner declare all the rental income, especially if “they do all the work.” After all, they’ll pay less tax on it, right?

Unfortunately, it’s not that simple, and this common mistake can lead to problems with HMRC.

Joint Ownership Means Joint Tax Responsibility

Rental income from property jointly owned by married couples and civil partners is usually taxed in equal shares. By default, this means a 50:50 split, regardless of who manages the property or collects the rent.

If you own the property in unequal shares and are entitled to the income in those same proportions, you can apply to have the income taxed that way instead, but you’ll need to formally declare and provide evidence of your beneficial interests to HMRC.

Where a property is jointly owned with someone other than a spouse or civil partner, rental profits (or losses) are normally divided according to each person’s ownership share, unless you’ve agreed on a different allocation.

What If You Want a Different Split?

Married couples and civil partners can split the income in different proportions, but only if:

• You own the property in unequal shares, and

• You’ve submitted a Form 17 to HMRC, with supporting evidence of the ownership split (for example, a Declaration of Trust).

Without this paperwork, HMRC will not accept a different allocation, meaning each legal owner must still report their share equally.

It’s also important to note that an accountant can only assist with the tax declaration side. Any legal change in beneficial ownership, such as preparing a Declaration of Trust, must be handled by a solicitor or legal professional, not an accountant.

A Common Mistake

Many people assume they can simply put all the rental income on the lower earner’s tax return to save tax, but unless the correct legal and tax steps are taken, both owners are still required to declare their share. Getting this wrong can lead to backdated tax, penalties, interest charges, and in some cases, HMRC may even treat it as tax avoidance. If you think you might have been getting it wrong, there are still ways to put things right.

What If You Haven’t Been Declaring It Correctly?

If you realise that your rental income hasn’t been declared in line with HMRC’s rules, don’t panic, there is a way to put things right! HMRC runs something called the Let Property Campaign, which allows landlords to make a full disclosure of undeclared rental income. By using this scheme, you can usually settle what you owe on more favourable terms than if HMRC discovers the issue first.

Taking action sooner rather than later helps minimise penalties and interest, and shows HMRC that you are making a genuine effort to get your tax affairs in order.

Keep It Right, Keep It Safe

If you jointly own a rental property, remember that the default position for married couples and civil partners is a 50:50 split. Both owners must declare their share of the income on that basis, unless you have the correct legal documents and have submitted a Form 17 to HMRC to confirm a different arrangement. Keeping this right ensures everything is clear, compliant, and safe from penalties.

Need Help?

If you’re unsure how rental income should be split or reported, particularly with joint ownership, the right advice can save you stress, penalties, and unnecessary tax. Get in touch with us today, and we’ll make sure your rental income is reported correctly on your self-assessment tax return.