Form 17 is a declaration submitted to HMRC (HM Revenue and Customs) when a couple, typically married or in a civil partnership, jointly owns a property but does not share the income from it equally.
This form allows them to declare how the income is actually split – based on their beneficial ownership – for the purpose of income tax.
In this article, we explain what a Form 17 Declaration is, when it’s needed, and how it affects property owners from a tax perspective.
What Does a Form 17 Declaration Do?
By default, HMRC assumes that couples who jointly own property share any income it generates equally (50:50). This assumption applies even if one party actually owns a larger share of the property.
If a couple wants to be taxed based on their actual ownership shares – for example, 80:20 instead of 50:50 – they must submit a Form 17 Declaration along with evidence (usually a Declaration of Trust) confirming the unequal ownership.
Submitting this form ensures that each party is taxed fairly on the income they actually receive from the property, rather than the default 50:50 split.
When Should You Use a Form 17?
You should use a Form 17 if:
- You and your spouse or civil partner jointly own a property.
- The property generates income (e.g. through rent).
- You do not own the property in equal shares.
- You want to be taxed according to your actual share of the income.
The form must be submitted within 60 days of signing the declaration of trust or any document that changes your beneficial ownership. If you miss this deadline, HMRC will continue taxing both parties on a 50:50 basis.
It’s important to note that Form 17 cannot be used by unmarried couples, even if they co-own a property. In those cases, different tax rules apply.
What Is a Declaration of Trust and How Does It Relate?
To support a Form 17 Declaration, you must provide a legally binding Declaration of Trust (also known as a Deed of Trust). This document outlines how the beneficial interest in the property is split between the two owners.
Without this evidence, HMRC will not accept a Form 17. The declaration must reflect the same split in income that you’re declaring on the form – for example, if you’re stating that one person owns 75% of the property and receives 75% of the income, the Declaration of Trust (or Deed of Assignment) must support that.
Why Is a Form 17 Important?
Submitting a Form 17 can have a significant impact on how much income tax each partner pays. In many cases, it is used as a tax planning tool – for example, where one partner is a higher-rate taxpayer and the other is not. By allocating a greater share of the income to the lower-rate taxpayer (if they own more of the property), the couple can reduce their overall tax liability – but only if the beneficial ownership genuinely reflects that split.
However, submitting a Form 17 falsely or without appropriate documentation can lead to penalties or HMRC investigations. It’s crucial that the ownership split is real and correctly documented.
How to Submit a Form 17
The form can be downloaded from the HMRC website. You’ll need:
- Your personal and property details
- Details of the income-generating property
- The percentage split of beneficial ownership
- A signed Declaration of Trust (or equivalent evidence)
Once completed, you must send the form and accompanying documents to HMRC within the 60-day timeframe.
Key Points to Remember
- Form 17 is for tax purposes, not for conveyancing or property sales.
- It is only for married couples or civil partners who jointly own property.
- It lets HMRC tax rental income based on actual ownership shares rather than the default 50:50.
- A Declaration of Trust is required to prove the unequal ownership.
- It must be submitted within 60 days of the ownership change.
Wrapping Up
Form 17 is a useful tool for couples looking to ensure their property income is taxed fairly and in line with how they actually share ownership. However, it must be backed by clear legal documentation and submitted within HMRC’s strict timeframe.
If you’re considering submitting a Form 17 or changing the ownership structure of a property, it’s advisable to seek professional advice from a solicitor or tax advisor. Doing so will help you avoid errors, stay compliant with HMRC rules, and potentially benefit from more efficient tax arrangements.
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