Form 17 and its uses

By | 11 October 2022

Assets such as an investment property are sometimes jointly held in the names of a married couple (or civil partners).

Generally, the couple is treated for income tax purposes as beneficially entitled to the property income in equal shares (the ’50:50 rule’) (ITA 2007, s 836).

Example 1: The 50:50 rule

Carl and Denise are married and living together. Carl is a basic rate taxpayer; Denise pays tax at the higher rate. They jointly own an investment property (i.e., Carl 75%; Denise 25%). The property rental income is £20,000. Carl and Denise each pay tax on income of £10,000.

Living together

The 50:50 rule applies while the couple is living together.

For these purposes, a married couple is treated as ‘living together’ broadly unless they are separated under a court order or by deed of separation or are in fact separated in circumstances where the separation is likely to be permanent.

Unequal interests

There is an exception from the 50:50 rule where the couple has unequal beneficial interests, and they submit a joint declaration to HM Revenue and Customs (HMRC) for their income from the property to be taxed based on their actual interests in the property, instead of under the 50:50 rule (ITA 2007, s 837).

The declaration may be made if either of them is entitled to the income to the exclusion of the other, or if they are beneficially entitled to the income in unequal shares, and their beneficial interests in the income correspond to their beneficial interests in the property. In practice, declarations of unequal beneficial interests are made on HMRC Form 17.

Example 2: Form 17 declaration

Hence in Example 1, following a valid Form 17 declaration, Carl would pay tax (at 20%) on rental income of £15,000, and Denise would pay tax (at 40%) on £5,000. Their overall income tax bill is therefore lower.

‘Small print’

The declaration on Form 17 is made by both individuals jointly. Individuals who are not spouses or civil partners (e.g., parent and adult child, or siblings) cannot make a Form 17 declaration. It must be submitted to HMRC within 60 days from when the last spouse signed; otherwise, it is invalid. Form 17 is generally completed online on the Gov.UK website (

The form lists the circumstances when it cannot be used (e.g. partnership income or income from close company shares). Furthermore, spouses or civil partners must check that they jointly own the property as beneficial ‘tenants in common’ as opposed to ‘joint tenants’ (different rules apply in Scotland), because a Form 17 declaration cannot be made by joint tenants.

HMRC treats a valid declaration on Form 17 as continuing to apply in later tax years. For a married couple, it continues until one spouse dies, or the couple separates permanently or divorces, or until the beneficial interest of a spouse in the property or income changes.

Practical point

It may be possible to stop the declaration on Form 17 from having effect by making a small change of beneficial interest in the income or property, such as by one spouse transferring part of their beneficial interest to the other. The 50:50 rule would then apply again unless another declaration is made.

The above article was first published in Tax Insider (January 2022) (