Form 17 to HMRC

Does anyone understand Form 17?

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Form 17 is used by married couples or civil partners who jointly own a property, but wish to allocate the income from that property in a way that is different from the default 50/50 split.

Here are a few key points about Form 17:

  1. Purpose: The main purpose of Form 17 is to declare a different distribution of rental income for tax purposes. This can be useful when one spouse or partner is in a lower tax bracket than the other, as it allows them to allocate a greater share of the rental income to the lower-income individual. This may help optimize the overall tax liability of the couple.

  2. Eligibility: Form 17 is applicable to properties owned jointly by spouses or civil partners. It cannot be used for properties owned jointly by individuals who are not married or in a civil partnership.

  3. Declaration: The form requires details of the property, including the address and the percentage share of ownership for each spouse or partner. It also requires the declaration of the desired split of rental income.

  4. Submission: The completed Form 17 should be submitted to HMRC either online or by mail. It is advisable to keep a copy of the form for your records.

It’s important to note that the allocation of rental income through Form 17 is only applicable for tax purposes and does not affect the legal ownership of the property. Each owner remains legally responsible for the property and its associated obligations.

As tax rules and regulations can be complex and subject to change, it is recommended to consult with a qualified tax professional or refer to HMRC’s guidance for specific advice regarding Form 17 and its implications in your situation.

A friend of mine used this for their rental flat as the wife doesn’t have a full time job whereas the husband works full time hence Form 17 helps them pay less tax by declaring the flat is mostly owned by the wife. Otherwise the husband would pay more tax with the default 50/50 split.

Before you can use form 17 to make a declaration, you may need to get a solicitor to draft a deed of trust changing the percetages of beneficial ownership of the property to what you want them to be.

Thanks for your comments.

Does anyone estimate the costs to implement this?

I have been quoted £700+vat

To submit the Form17 to HMRC??
Why can’t you just do it yourself?

@J114 my situation may/not be similar to your but here is why and how i used the form17 and declaration

  • i work full time
    -my Mrs works full time
  • I was very close to hitting the next tax band
  • I Mrs was still far off from hitting the next tax band
  • i didnt want 50/50 split because that will push me into the next tax band and thus being subject to HICBT - high income child benefit tax. everyone is entitled to child benefits but when you hit a certain threshold, you pay back whatever your child collects. avoid it if you can
  • the form 17 and declaration was used to assign beneficiary interest to my Mrs such that we were both level up to hitting the next tax band

i posted before how to get the declaration, i think Open rent holds the post for review. hopefully they release it. anyway, you can send me a private message, and i am willing to send the declaration i used for your reference

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hell @J114 , as @stt106 rightly said you can do it yourself. dead easy. i guess where you needed guidance is drawing up the declaration.

£700 is way way too expensive in my opinion. When I wanted to do mine about 2 years, i was quoted around £500. I refused. I went to download some templates online. wrote the declaration. Submitted it along a completed form17. Didn’t hear back from HMRC. 10 months later i got a later that the declaration was rejected. I rang to ask why, I was told the declaration needed to be witness - a witness signature was required.

luckily it was my first year as a landlord, i made a loss that year and there was no tax liability on my part and my Mrs.

i searched online again and found a guy who claimed to have used his declaration template for decades. I bought the template from him for a fraction - word document. not different from what i initially wrote but used his anyway. I filled it out and got someone to sign in the witness section. Submitted it to HMRC along a new completed form17. It was accepted, not issues

if you want, you can send me a private message. i am willing to pass it on to you for £30 with instructions on filling form 17 etc

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Drafting a Deed of Trust is a reserved activity which can only be done by a solicitor.

if you haven’t done it before, you would think that way. Obviously if your tax situation is complex, then you want all the headache to be handled by those who hand headaches. But if you want to know how stuffs work or you are submitting form17 because you want to pass on profit from your property investment to a partner who isn’t affected as much as you are in terms of tax threshold, trust me , you don’t need a solicitor

i bet you would also say , self assessment tax returns is a reserved activity which only accountants should do.

i will post the declaration of trust benefit i submitted here and you will see its not a complex document. in fact you can rip it off the internet. mine was initialled rejected because there was no witness signature, not the content itself

“if you don’t want to know, you won’t know”

I’m talking about legally reaerved activity. Clearly anyone can choose to break the law and may or may not get away with it.

Tax returns and accountancy work is not a reserved activity as far as I am aware.

so what makes you think drafting a document (beneficiary trust declaration) to tell HMRC that you are assigning a portion of the profit from your property investment to your wife/partner, is reserved ?

the guardian is on the gov website. The template is on the gov website. it is not a complex document for anyone who wants to understand it. It is a declaration. it is a statement. there is no law breaking there. if you write the statement in away that doesn’t follow the template, your declaration is rejected. you pay 50/50 tax until you submit an acceptable declaration.

ask an accountant to setup a BTL company for you where you are the only director and shareholder. I guarantee you will pay above £250. Again this is a straightforward process that cost you not more than £12 and 30 mins of your time if you really want to understand how things work.

there is no law breaking . its either you want to learn to do some things yourself (for now and the future) or continue to be at the mercy of others

I dont think you understand the process which has 2 stages. Firstly agreeing a deed of trust between the parties to alter the beneficial ownership, then completing form 17 to inform HMRC. The latter anyone can complete themselves. The DoT has to be drafted by a Solicitor.

anyone who know what he/she is doing can draft any letter. If you have used it before you would know its a very simple document that shows who the legal owners are and who the beneficiaries are and the % split between the beneficiaries. the property/properties and addresses. A ‘declaration’ (a statement) of 5 lines in the end. signature section and a witness section.

@David122 i believe you haven’t seen or used this document. I have seen it. I have used it and i have a response from HMRC confirming receipt and accepting my declaration. I have submitted self assessment tax returns for 2 two years now and the 3rd around the corner. My returns is based on the declaration.

i maintain it is not a reserved process. just a bit of digression ; have you heard of people representing themselves in court? i bet you would argue thats a reserved thing as well.

if you know what you are doing and you understand these processes, you can get things done yourself and in most cases, better and faster

in one of my houses, I went to the loft and realised there was no party wall separating the buildings in terrace. You could literally move through the loft from one house to the last house in the terrace.

I thought if there is fire in the terrace, all the houses would quickly burn down as the fire would spread through the loft area. I wanted to put a partition wall on my boundary left and right. read up on it. I had the open of instructing a surveyor to draw a party wall agreement between myself and my left/right neighbours. I had a discussion with left/right landlords about my concern. downloaded a party wall agreement template from the internet, modified it and gave it to the landlords.

again you would argue its a reserved thing innit? there are so many things you can do yourself that you think are reserved and aren’t. you just need to be willing to learn how stuff works.

You clearly didnt read or understand my last post, but I give up.

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